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Annual Report and Statement of Accounts 2009/10

MAYOR OF Contents

2 Transport for London – Annual Report and Statement of Accounts 2009/10 Contents

Message from the Mayor 4 Commissioner’s foreword 6 The year at a glance 8 Operational performance tables 10 Efficient nda effective business operations 12 Supporting economic development and population growth 16 Enhancing the quality of life for all Londoners 34 Improving the safety and security of all Londoners 44 Improving transport opportunities for all Londoners 52 Reducing transport’s contribution to climate change and improving its resilience 58 Supporting delivery of the 2012 Games and securing a lasting legacy 66 Improving efficiency, equality and partnerships 70 Progress against the Mayor’s Transport Strategy 76 Statement of Accounts 82 Chief Officers 164 Members of TfL 166 Membership of TfL panels and committees 168 Directors of Ltd 170 Remuneration 172

3 Message from the Mayor

this save hundreds of millions of pounds, it will also mean that we can reduce the impact of weekend closures on passengers and businesses. The Tube will be upgraded in a way that suits Londoners, not lawyers. The construction of Crossrail, a project that is now a potent symbol of the country’s confidence in economic recovery, continues apace. Despite the pressures on public finances, This Annual Report sets out the areas in now is not the time to curtail the scope or slow the pace of investment in London’s which Londoners started to see tangible transport system. The Tube upgrade, benefits of sustained investment in their Crossrail and the network are of such transport system. critical strategic importance to the UK’s economy that ill considered cuts would The truly marvellous, shining, air-conditioned prove catastrophic. It would stifle growth in line was completed and opened the UK’s most productive area and condemn on time and to budget. Linking Hackney and millions of commuters to overcrowding and , it will create jobs, generate wealth an increasingly unreliable service. and give whole communities a better chance to enjoy London’s prosperity. It is the first To safeguard this investment, I have had to major stage in what will become the Capital’s make tough decisions. I increased fares to orbital railway. ensure that London’s own contribution to this programme can be maintained. The engineered a 50 per cent increase in capacity on its busiest The Commissioner and I also drove forward line by introducing a three-car service – again our root and branch efficiency programme. on time and to budget. This will deliver more than £5bn of savings, blazing a trail for the Government’s own The Tube upgrade – a project of vital approach to cost savings, now just getting importance to the UK economy – under way. forged ahead. But, recognising the vital importance of Better still, we finally heard the death- major capital investment should not blind us rattle of the monstrously expensive and to the very many positive things we can do inefficient Public for relatively small sums of money. Private Partnership (PPP). The final PPP contractor, Tube Lines, is now a subsidiary After many years of people talking about it, I of Transport for London (TfL). Not only will got the Train Operating Companies to agree

4 Transport for London – Annual Report and Statement of Accounts 2009/10 to use Oyster, enabling rail passengers in London to get the benefits and convenience of TfL’s . The cycling revolution is happening. The Barclays Cycle Hire Scheme launches this summer and the first two Cycle Superhighways are in delivery. We’ve had great success in making the transport system even safer. Bus-related crime is at a six-year low and Tube crime has fallen by 26 per cent in recent years. These fantastic results are due to more uniformed officers, highly visible staff at stations and more CCTV and Help points. This year I launched my new Transport Strategy setting out my long-term vision for London’s transport to ensure we continue to deliver critical upgrades ahead of the 2012 Games and beyond. I’m looking forward to working with the Government to ensure that crucial investment in the Capital’s transport system is protected so that vision can be realised. My thanks go the management, staff and Board of TfL for their tremendous achievements and to Londoners for their continued support for improved transport.

Boris Johnson

Message from the Mayor 5 Commissioner’s foreword

The economic climate is the toughest in living memory. Therefore, it is right that we have taken decisive and tough action to provide clear value for tax and fare payers. Our focus on this will be continuous and relentless. We are ahead of the game in delivering one of the largest efficiency programmes anywhere in the UK public sector, with more than £5bn being saved. Work on multiple schemes, for which no funding is available, has been stopped; senior salaries have been frozen for London is the economic powerhouse two consecutive years; and the Chief Officers and I have waived our performance awards. In of the UK. Our job at Transport for addition, back-office costs are being reduced London (TfL) is to help keep it that way by twenty five per cent, overall staff numbers by providing the day-to-day transport are being reduced by eight per cent, spending services required to support investment on consultants and temporary workers in the Capital, future growth and improve has been cut, we have moved significant numbers of staff to cheaper offices, and Londoners’ quality of life. we have radically reduced marketing and Our high levels of operational performance, communications expenditure. as measured by customer satisfaction and The period has also seen us introduce greater other performance metrics, has continued. scrutiny and transparency of what we do and I believe that this is the longest period of how we do it. A new independent group – the sustained good operational performance by Investment Programme Advisory Group under TfL or any of its predecessors since before the chairmanship of David James – has been the second world war. established to advise the TfL Board and publicly We are also making good progress in delivering report on our delivery. Not only is TfL now more the Mayor’s immediate priorities, and his efficient, it is also a more open organisation. longer-term vision for transport. Significant My thanks go to the Chief Officers, the achievements in the year include new management and staff, including those of our and refurbished stations, improved Tube, contractors, and all of our other partners for Docklands Light Railway and Overground trains their hard work during the year. and, of course, the new . In the process, and as the credit rating agencies among others have acknowledged, we have again demonstrated a very strong track record of delivering on time and to budget. Peter Hendy Commissioner Transport for London

6 Transport for London – Annual Report and Statement of Accounts 2009/10 Commissioner’s foreword 7 The year at a glance

April May >> Tube customer satisfaction reaches >> Construction starts at Canary a record high with average scores Wharf Crossrail station of 79 out of 100 >> The Mayor launches plans for an >> iBus is installed on all London , action-packed summer of cycling providing audio-visual, ‘next stop’ to pave the way for London’s announcements for passengers cycling revolution

June July >> Touch-screen Tube ticket machines >> Roll-out of air-conditioned become more accessible following Overground trains begins an upgrade to offer 17 languages >> TfL gets the go-ahead for £700m >> TfL contributes £4m towards a Victoria Tube station upgrade, new lock in -by-Bow to with work due to start in 2011 move more freight transport to the waterways

August September >> TfL launches a 12-month trial >> Imperial Wharf Overground of Travel Safe Officers, making station opens in west London even safer >> TfL launches the London >> Serco announced as the operator Permit Scheme to help reduce of London Cycle Hire Scheme congestion and smooth traffic flow in the Capital

8 Transport for London – Annual Report and Statement of Accounts 2009/10 October November >> The first air-conditioned Tube >> Oyster pay as you go now valid on train arrives in London, a step ’ services towards replacement of the entire >> New Tube station ticket hall cuts fleet queues at King’s Cross St. Pancras >> New South Quay Docklands Light Railway station opens

December January >> chosen to design and >> Additional cycle funding announced build the New Bus for London for 13 Outer London boroughs >> Legible London pedestrian >> Oyster pay as you go now accepted information system expanded on all services in to cover more of the West End, Richmond and , plus South Bank and Bankside

February March >> The first three-carriage trains go >> Bus-related crime across the into service on the Docklands Capital drops by 10.5 per cent, Light Railway reaching a six-year low >> Smarter Travel Sutton scheme >> A £6m transformation of delivers a 75 per cent increase town centre is completed in cycling

The year at a glance 9 Operational performance tables

Buses

2009/10 2008/09 2007/08 2006/07 2005/06

Passenger journeys (millions) 2,257 2,247 2,176 1,880 1,816 Kilometres operated (millions) 483 478 468 458 454 Percentage of schedule operated (per cent) 97.1 97 97.5 97.5 97.7 Excess wait time (high frequency) (minutes) 1.1 1.1 1.1 1.1 1.1 Passenger satisfaction (score) 79 80 79 78 78

Note: The methodology for calculating bus passenger journeys changed from April 2007 and the re-based figure for 2006/07 for comparison is 2,069 million

London Underground

2009/10 2008/09 2007/08 2006/07 2005/06

Passenger journeys (millions) 1,065 1,089 1,072 1,014 971 Kilometres operated (millions) 69.4 70.6 70.5 69.8 68.8 Percentage of schedule operated (per cent) 96.6 96.4 94.8 94.5 93.6 Excess wait time (weighted) (minutes) 6.4 6.6 7.8 8.1 7.5 Passenger satisfaction (score) 79 79 77 76 78

10 Transport for London – Annual Report and Statement of Accounts 2009/10 Docklands Light Railway 2009/10 2008/09 2007/08 2006/07 2005/06

Passenger journeys (millions) 69 66 67 61 54 Kilometres operated (millions) 4.6 3.9 4.4 4.4 3.6 On-time performance (per cent) 94.8 94.6 97.3 97.8 97.3 Passenger satisfaction (score) 91.9 92 97.3 96.8 95.4

Note: Significant infrastructure and construction work was carried out on the Docklands Light Railway to prepare for three-car services which has impacted on 2009/10 passenger satisfaction.

London

2009/10 2008/09 2007/08 2006/07 2005/06

Passenger journeys (millions) 26.5 27.0 26.3 24.8 20.8 Kilometres operated (millions) 2.6 2.7 2.6 2.5 2.4 Planned kilometres delivered (per cent) 98.6 98.4 99 99.3 97.4 Passenger satisfaction (score) 86.3 86 85 84 n/a

London Overground 2009/10 2008/09 2007/08

Kilometres operated (millions) 3.4 3.4 n/a On-time performance (per cent) 93.2 92.2 91.4 Passenger satisfaction (score) 78.5 73 n/a

Note: London Overground services started operation in November 2007. Previously, services were operated by Metro. Journey data are not reported at present as passenger numbers are derived from revenue allocations based on passenger surveys and can only be considered as estimations. TfL is currently introducing a new fleet of trains on to the London . These trains have a weighing system which should allow passenger data to be provided in future years.

Operational performance tables 11 12 Transport for London – Annual Report and Statement of Accounts 2009/10 Efficient and effective business operations

In a difficult economic climate, TfL has continued to work hard during 2009/10 to deliver its investment commitments within available funding levels, while protecting frontline services.

Reducing costs A continuous savings exercise was undertaken as part of TfL’s planning process. The scope and ambition of TfL’s savings All budget holders were asked to identify programme has nearly doubled since last options to meet a 2.5 per cent savings target year’s budget, with £438m gross savings – through further efficiencies, opportunities budgeted in 2010/11. to generate additional secondary revenue and by identifying or cutting out the lowest Over the next three years £1.7bn of priority areas of expenditure. savings are assumed as part of a wider cost reduction programme totalling more than This year, TfL continued to identify further £5bn over the Business Plan period. This efficiencies, examine opportunities to represents an ambitious and comprehensive generate additional secondary revenue change programme encompassing all areas of and highlight the lowest priority areas the organisation. of expenditure. This resulted in a comprehensive programme comprising The Business Plan, on which last year’s around 250 individual initiatives, ranging from budget was based, included £2.4bn of small-scale local savings projects to high- efficiencies (arising from ‘back-office’ and value organisational change programmes. support expenditure) resulting from TfL’s During the past financial year, gross savings Operating Cost Review. On coming to office, of £306m have been achieved. and faced with significant financial pressures, the Mayor challenged TfL’s management and staff to deliver further cost savings in order to reduce the need to cut investment or frontline services.

Efficient and effective business operations 13 London Underground Surface Transport

A number of savings programme activities An independent review of the bus network have begun and are delivering benefits: has been carried out to explore the potential for further savings in the planning and >> The integration of has led contracting of services. to over 1,000 fewer roles in central services The study concluded that bus provision >> A rationalisation of project requirements efficiency in London compares favourably to has reduced sub-surface line upgrade costs other cities, and the most significant savings can only be achieved through reducing the >> Value engineering and procurement quality or frequency of services. However, strategy reviews have saved capital there are others which are being pursued, project costs for example, working with operators to >> Reduced maintenance costs have been investigate ways of reducing the costs of delivered as a result of a number of vehicle financing. contract consolidations This year, East Thames Buses was sold to >> Improved procurement processes Transport Services Limited, have achieved project cost savings part of the Go Ahead Group. The transfer on the sub-surface railway power will save TfL £4.5m over the next three years, upgrade programme through the sale of the asset and reduced operating costs. Considerable savings have also been achieved in the costs of Congestion Charging and Traffic Enforcement through reductions in staffing and contractual efficiencies. Over the Business Plan period, £240m savings will be achieved.

14 Transport for London – Annual Report and Statement of Accounts 2009/10 A review of marketing and customer research has led to savings of more than £23m per Savings of £2.9m for 2009/10 have been annum in marketing expenditure across TfL, achieved through reducing back-office of which £16.5m has been re-allocated to support and overheads. fund the Mayor’s election commitment to provide extra policing resource. Corporate Phase 1 of a project to streamline customer The number of directorates in the TfL contact centres was completed during the corporate centre has been cut from five to year, saving £20m. Further integration and three. The number of Chief Officers was also technology improvements will be made over reduced with corresponding cost savings, the next three years. and Planning was downsized following the Finance activities are also being consolidated cancellation of work on unfunded projects. and rationalised, particularly the areas of A review of ticketing costs has resulted management reporting, business planning in the termination of an expensive Private and financial transactions. The HR function Finance Initiative (PFI) contract that provided has also been reviewed. a range of ticketing services for London Underground and . A new contract will offer greater value for money, with increased service levels and greater flexibility for future improvements. Savings have also been achieved by moving some staff to alternative office accommodation, leveraging relevant lease expiry/break clauses for higher cost buildings and implementing plans to move out of the more expensive properties. TfL vacated four locations during the year.

Efficient and effective business operations 15 16 Transport for London – Annual Report and Statement of Accounts 2009/10 Supporting economic development and population growth

TfL is investing billions to ensure London is prepared for the estimated population and workforce growth – 800,000 and 400,000 people respectively by 2021.

Tube upgrades Tube passengers in West London now have more frequent and reliable services after With London’s population expected major changes to enhance the Circle line to grow by 1.3 million over the next 20 service were introduced during December. years, the expansion of the Underground The line now runs as an end-to-end service network is vital. The delivery of the – from Road, around the circle biggest investment programme in through High Street Kensington, Victoria and Liverpool Street, then on to Hammersmith. generations continued during the year A small proportion of passengers now need and when complete, will provide to change trains at , but the around 30 per cent extra capacity on new service pattern has almost doubled the the Tube. frequency of trains between and Hammersmith. It has also allowed Improvements are also being made to the entire service to recover more quickly existing services. line passengers following any incidents and enabled capacity are experiencing improved journeys after a to be increased on some other parts of the new timetable was introduced. The line is District, Metropolitan and Hammersmith used by more than 650,000 people a day and & City lines. provides an important link through the heart of the Capital’s tourist and entertainment Tube Lines, the PPP contractor, was unable districts and beyond to . to finish the upgrade by the The timetable changes, introduced end of December 2009, the contractual progressively with the last phase in May, have completion date (see page 21). The project, included increasing services on some of the which is the first of the major line upgrades busiest parts of the line at certain times. designed to deliver significant extra capacity, Trains are now more reliable and passenger is likely to be completed at least 10 months waiting times have dropped by an average 25 late, while extensive weekend closures per cent. Additionally, overall journey times continue to disrupt services. Tube Lines have been cut and the modified service can has required almost three times as many recover from delays more quickly. weekend closures as were originally planned.

Supporting economic development and population growth 17 When complete, the Jubilee line upgrade The first of the new air-conditioned, walk- will allow trains to run every two minutes through ‘S-stock’ trains for the sub-surface at peak times, and provide a third more (Circle, District, Hammersmith & City and capacity. This is in addition to the 17 per Metropolitan) lines was delivered in October cent capacity increase created in 2006 with and is being tested prior to introduction on the introduction of a seven-car service. It the Metropolitan line later this year. This will will also reduce waiting times, provide faster begin the process of replacing the current trains, and journey times will be around 22 sub-surface train fleets, some of which have per cent quicker. Overall, at least an extra been in service for nearly 50 years. 10,000 passenger trips an hour will be able to take place during peak periods. In July, London Underground issued an invitation to tender for the re-signalling of In stark contrast to Tube Lines’ failure to these lines. This is the biggest piece of work deliver, good progress has been made on the in the entire Tube upgrade programme and upgrade of lines transferred to TfL control will replace a variety of systems that have following the collapse of Metronet. The been in place for more than 50 years, with is being upgraded with a new some equipment up to 100 years old. The signalling system, a control centre and a new signalling system will be more efficient, fleet of 47 new trains. The first train entered delivering significant extra capacity and passenger service in July and following enabling quicker and more frequent journeys. successful running at off-peak times, is now operating at peak times as well, with further new trains now in service and the roll-out of the whole fleet continuing. The new signalling and control systems have all been installed and continue to prove themselves 30% alongside the existing signalling, which will increase in London’s rail-based remain in place until all the old trains have capacity due to Crossrail and been phased out. Tube upgrades

18 Transport for London – Annual Report and Statement of Accounts 2009/10 Following the Metronet collapse in 2007, Station upgrades London Underground decided to re-tender as the original contract, placed by Metronet, Improvements continued at key Tube did not provide the most effective technical stations across the network. A total solution or the best value for money. of £1bn is being invested at Court Road to upgrade the Underground By the end of December, tenders for this project had been received and London station, build the new Crossrail station Underground began the process of evaluating and create a piazza outside Centrepoint. them. One of the targets set to potential The main construction is expected to be suppliers was to reduce, as far as possible, finished in 2016 when passengers will benefit the need for weekend and other closures. from a ticket hall almost six times the size Although some level of closures will always of the current one, plus new entrances and be required to complete the work safely more access points to platforms, which and on time, the aim is to learn from the will reduce congestion. There will also be experience of other metros, such as Paris additional escalators and five new lifts and Madrid, and deliver the upgrade with less providing step-free access. disruption than has been necessary on some other Tube lines. The Tube upgrades and Crossrail – the 118km rail link between Maidenhead and Heathrow in the west and Shenfield and in the east – constitute the backbone 80 million of the investment programme and are passengers use Victoria Tube dependent on each other to realise their full station each year benefits. From 2017, when Crossrail services begin, they will add more than 30 per cent to London’s rail-based transport capacity. As well as progress with the major line In July, plans to upgrade Victoria Tube upgrades, the process of ongoing renewal station received Government approval, and of the Tube’s core assets continued – in March the redevelopment contract was with the replacement of 27km of track, awarded. Victoria is one of the Capital’s the refurbishment or replacement of 26 busiest stations, with more than 80 million escalators and lifts, plus the completion of 23 passengers using it each year. During the station refurbishments and modernisations. morning rush hour it suffers from severe overcrowding and it is often necessary to stop passengers entering for periods to avoid platform overcrowding. The station will benefit from investment of around £700m, and when the upgrade is complete, capacity will increase by around 50 per cent. It will have a larger ticket hall, seven

Supporting economic development and population growth 19 new lifts and nine extra escalators. Also, step- The station has more than 155,000 daily free access from street level to all platforms passengers and when Crossrail arrives will make it easier to change services. in 2017, this figure is expected to reach Construction is due to start during 2010 and 225,000. When complete, the station will will take around seven years to finish. provide a seamless interchange between Tube and Crossrail services, improved In November, a new state-of-the-art journey times and reduced congestion. ticket hall opened at King’s Cross St. Other benefits include a new ticket hall Pancras Underground station, doubling on Marylebone Lane, which will increase capacity, cutting congestion and improving capacity and provide step-free access to accessibility. Passengers now benefit from platforms, plus more escalators to the 10 new escalators, six lifts, plus more ticket Jubilee line. machines. Additionally, around 300 metres of link the ticket hall with the Northern, The redevelopment will transform the Piccadilly and Victoria lines, providing new area and act as a catalyst for entrances to the deep-level platforms. There further investment to secure the West End is also step-free access to five of the six lines as a premier shopping and entertainment that serve the station opening up significant destination and employment centre. new journey opportunities. Step-free access to the will be available Utility diversions and enabling works around from mid-2010. Crossrail’s Bond Street Hanover Square station began in December in preparation for King’s Cross St. Pancras is a national the start of construction, and will continue and international gateway for millions of throughout 2010. Londoners and visitors every year. It is a key 2012 Games station and by the time Improvements are also continuing at the event arrives in the Capital, more than Blackfriars Tube station, which is closed until 100,000 people will be passing through it late 2011 while the main railway station is at peak times every day. The 2,000 square rebuilt. Although the upgrades are primarily metre northern ticket hall, which was funded designed to improve the network, by the Department for Transport (DfT) as passengers on the Underground will also part of TfL’s Investment Programme, is enjoy a completely transformed station when the station’s third ticket hall and an early it re-opens. It will provide quicker and easier indication of the transport improvements interchange between National Rail and Tube being delivered in preparation for the Games. services, offering new escalators from the platforms to a larger Underground ticket hall In January, TfL issued an invitation to tender area, plus step-free access. Additionally, there for the £300m redevelopment of Bond Street will be an improved public address system, Tube station. The contract is likely to be better lighting and enhanced station security. awarded by summer 2010 with construction due to begin at the end of the year.

20 Transport for London – Annual Report and Statement of Accounts 2009/10 Crossrail on track open in early summer 2011, it will provide first-class engineering training in Europe’s largest construction project, skills needed to work in excavation Crossrail, gathered pace in 2009/10. The and underground construction. Tunnelling for line will revolutionise transport in the Crossrail will begin in late 2011. South East and bring 1.5 million people within a 60-minute commute of the City. PPP contracts In March, the PPP Arbiter published Final Crossrail will provide improved access to Directions on Tube Lines’ costs for the jobs, health, education and welfare services. It will increase the Capital’s rail capacity second period of the PPP contract. by 10 per cent and help reinforce London’s The Arbiter determined that the economic position as a world-leading business and and efficient price for maintaining the financial centre. upgrade of the Jubilee, Northern and In September, Crossrail secured one of the Piccadilly lines over seven-and-a-half years largest loans ever awarded for a transport from mid-2010 to 2017 should be £4.46bn. project when the European Investment Bank The final costs remained much less than the agreed to provide it with a £1bn loan facility. original £6.8bn sought by Tube Lines – and This recognises the importance of the new its shareholders, Amey (Ferrovial) and Bechtel rail link to London’s economy and that of the – and around £1.3bn less than their final UK as a whole. demand. The Arbiter’s views also endorsed Construction work began on the first TfL’s original cost evalution but highlighted a Crossrail station – – in May. shortfall against TfL’s £4bn budget. Located in North Dock, it will be one of the Rather than demanding that Tube Lines biggest stations on the Crossrail network raise the finance required to complete the and will include 9,290 square metres of retail upgrades (as was always envisaged under space and a roof-top park. the PPP contracts) the Arbiter suggested TfL Demolition work was completed at should raise additional funds itself, or amend to enable a major its requirements. redevelopment of the station. Crossrail The Mayor and TfL argued that this situation construction will begin here during 2010 and, demonstrates that the PPP contract is not in May, a 40-metre crane was brought in to delivering for Londoners and taxpayers, assist with utility diversions in the Charing and that all PPP finance should be raised Cross Road area ahead of this work starting. by Tube Lines and its shareholders. TfL In April, the Mayor announced the setting up confirmed that it would continue to explore 1 of a tunnelling academy to be delivered by all options including legal remedies. Crossrail for the industry as a whole. Due to

1 The reporting period for the 2009/10 Annual Report ended on 31 March 2010. Following this, in May 2010, TfL announced that it had reached agreement with Bechtel and Amey (Ferrovial) to buy their shares in Tube Lines. When the deal is complete, Tube Lines will become a wholly owned subsidiary of TfL. This will bring the complex PPP structure to an end.

Supporting economic development and population growth 21 The Arbiter confirmed that Tube Lines could Docklands Light Railway upgrades have completed the Jubilee line upgrade on time and budget and should also have During 2009/10, further improvements finished around half the Northern line by were made to the Docklands Light summer 2010. The Arbiter also made it clear Railway to upgrade services from that delays, and any increased costs, were two to three carriages to provide a Tube Lines responsibility, as shown when a 50 per cent capacity increase. Major £327m claim against London Underground construction work included extending was rejected in its entirety by an independent QC earlier in the year. platforms, strengthening viaducts and improving junctions. By contrast, in June, the National Audit Office issued a report on the former The £325m project has been supported Metronet companies’ conduct which showed by a proactive marketing, stakeholder and that, following the period of Administration press campaign which has seen Docklands and subsequent transfer to TfL, performance Light Railway’s reputation remain intact improved on the Bakerloo, Central, Victoria, with passengers and key stakeholder groups Waterloo & City, Circle, District, Hammersmith during the works. & City and Metropolitan lines. The upgrade programmes now under London Underground’s direct control are progressing well.

22 Transport for London – Annual Report and Statement of Accounts 2009/10 In December, Bank Docklands Light Railway During October, an extraordinary feat of station closed for a month so engineering engineering on the Docklands Light Railway upgrades could take place on the Bank effectively ‘moved’ South Quay station to branch line – the network’s without any disruption to passengers. busiest route. On the evening of Friday 26 October, the station closed and a state-of-the-art £30m This two-and-a-half-year investment replacement opened the following Monday programme project was completed in just 125-metres away, after weekend testing. January and has seen three-car services gradually introduced. The first, full three-car The old station was situated on a curve, so service will operate for the London Marathon platforms could not be lengthened to cater in April, and a full passenger service will for three-car services. However, the new run on the Bank – Lewisham route before station was built further down the line on summer 2010. a straight section of track. The contractor, Taylor Woodrow, ensured it was constructed Fifty-five new carriages, costing £100m, have without the line or station ever being closed. been purchased to supplement the existing fleet and enable the three-car trains to run. The new station includes a full-length Their improved interior layout provides more canopy to provide weather protection for room and easier exit and entrance. Forty- waiting passengers and two ground-level eight are already operating and the final concourses. Both have Oyster facilities, seven are in production. ticket machines and cycle stands. The eastern concourse houses two fully-enclosed The suspension of services also allowed staircases to each platform. The western for the remodelling of the junction which concourse covers a larger area and provides splits the Bank and Tower Gateway lines, the bulk of the station facilities including enabling a more efficient and frequent train a passenger lift, two energy-efficient service to both destinations. The Olympic escalators and fully-enclosed staircases to Delivery Authority (ODA) contributed £6.4m each platform. for the work. The ‘move’ was funded by TfL and the New track works also took place during the London Borough of Tower Hamlets. The year. A complex ‘flyunder’ was completed borough secured £7m in Section 106 to allow quicker commuter journeys from contributions from developers involved in Bank to Canary Wharf and Lewisham. By the nearby Millennium Quarter. Section 106 linking Westferry and Canary Wharf stations of the Town and Country Planning Act 1990 it means trains can avoid stopping at West enables funding for works of public benefit India Quay station. And, a new flyover was to be obtained from developers by the completed at station, which local authority. enables more trains to use it. Benefits include an improved service for residents along the line and for the ExCeL exhibition centre.

Supporting economic development and population growth 23 Expanding the Overground Junction to West Croydon route when it opens in May. In July, the roll-out began of 54 new London Overground trains. During 2009/10, the new £7.8m Imperial Wharf station opened, providing west Londoners The three-carriage trains can carry almost 500 with a direct connection to the Overground people – an eight per cent increase compared and rail networks for the first time. to their predecessors – and feature a range of passenger benefits (see page 42). They are Passengers are now benefiting from high- also designed to be 10 times more reliable frequency rail connections to Shepherd’s than the previous models. By 2011, a fourth Bush, for shopping destination Westfield, and carriage will be added to services, increasing the major transport interchanges of Clapham capacity by a third. Junction and Junction. The station features Oyster ticketing, a staffed ticket The first 24 Overground trains are running on office, step-free access, CCTV, plus the the existing Stratford to Richmond, Clapham latest security and information features. Junction to Willesden Junction and Watford to Euston lines. A further 20 will run on the

24 Transport for London – Annual Report and Statement of Accounts 2009/10 Funding for the station was split as follows: Dalston Junction to link with and £4.8m from St George, the developer; £1m Highbury & Islington. In 2012, the second from TfL; £1.35m from the London Borough phase of the project will be completed of Hammersmith & and £650,000 from between and the Royal Borough of Kensington & Chelsea. Quays to form an orbital railway. It will serve 22 London boroughs and give hundreds of The project highlights the effective partnerships thousands of people quick and convenient between national, regional and local access to the Capital’s wider integrated organisations which enabled the station to be transport network. delivered ahead of schedule. It demonstrates how public and private sector cooperation Other passenger benefits will include new, can successfully provide significant new air-conditioned trains, driver-monitored infrastructure for the benefit CCTV, wider doors and gangways plus of local residents and businesses. wheelchair spaces. Four new step-free stations (Dalston Junction, , Imperial Wharf is served by London and High Street) will have Overground’s new air-conditioned trains and, improved safety features, new touch-screen from 2011, will welcome four longer trains an ticket machines and state-of-the-art CCTV. hour. Southern trains also call at the station. In February, London Overground’s Gospel In September, London Overground took over Oak to Stratford line closed for major track the management of 10 stations between and signal upgrades, platform lengthening New Cross and West Croydon to prepare and station refurbishments. The works are for the completion of the new London part of a massive £326m programme which Overground East London line. The stations will allow more frequent services and longer are New Cross Gate, Brockley, Honor Oak trains and is expected to provide additional Park, Forest Hill, Sydenham, Crystal Palace, capacity for the 2012 Games and beyond. , West , Norwood Junction and West Croydon. Demand on this section of the line is expected to rise by a quarter over the next TfL is investing £1.4bn to modernise the seven years. TfL and the ODA are providing Overground and incorporate the East London three quarters of the funding for the project, line. When it opens in spring 2010, it will form with the remainder coming from Network part of a revitalised and expanded London Rail and the DfT. The upgrade will be Overground network connecting Hackney complete in 2011, well ahead of the Games. in northeast London and Croydon in the south with frequent, metro-style services. In early April, two new 250-metre London The line will be a major contribution to the Overground platforms opened at Stratford regeneration of some the Capital’s poorest Regional station to reduce congestion, boroughs, employing 300 people. In addition, provide more capacity and increase half of its train drivers live in the boroughs of accessibility. They form an ‘island platform’ Lewisham, Southwark or Tower Hamlets. which allows trains to pass on either side. Additionally, there are new Help points, In 2011, the line will join with London clearer signs, information screens and CCTV Overground’s Richmond to Stratford branch, cameras. Access to the rest of the station is when a spur will be completed between

Supporting economic development and population growth 25 via two subways connected to the platforms These included schemes in South by lifts and stairs. Kensington, Woolwich and , plus new bus lanes in Holborn and . In early 2010, a programme of major A 10 per cent reduction in bus flows along station improvements began. All London was introduced in 2009/10, Overground stations will undergo significant and articulated buses were replaced on refurbishments to enhance entrances, ticket routes 38, 507 and 521. All other routes are halls, platforms, passenger information expected to be converted by the end of 2011 and safety features, including more CCTV – a Mayoral commitment. coverage and Help points. This work is due to be completed by late 2011. In February, two routes started running, serving , Barking Enhancing bus services and Dock. The new services TfL continues to improve routes and are expected to carry around six million passengers a year and provide better access to bus services. Around 6.4 connections between local communities, million people travel on the Capital’s jobs and other transport modes. buses every day, and more than 90 per cent of Londoners live within 400 metres Sixteen new vehicles manufactured exclusively for the service use dedicated bus of a bus stop. lanes which have been introduced to busier The bus network changes continuously, parts of the route. The buses feature the responding to people’s travel needs. latest environmentally friendly engines, more Research and liaison with stakeholders leg room and iBus. Street improvements have continued during the year and 72 formal also been delivered as part of the scheme, consultations were carried out on proposed including road re-surfacing, better street service alterations. lighting, upgraded bus stops and shelters and improved public spaces. Improvements included new services for housing areas, support for regeneration and The buses for the new service are among better links with the rail network. There were more than 1,000 that are replacing older also changes to various services as part of vehicles in TfL’s 8,500-strong bus fleet. town centre and street improvement projects. A borough-led project to reduce overall journey time and improve reliability for bus passengers along route 38 (from Hackney to ) was completed on time and to budget. The project, which received support from TfL, involved creating a more 90% pleasant and safe environment for all road of Londoners live within 400 users, including pedestrians and cyclists, metres of a bus stop while providing a robust service for local communities and businesses. It received the ‘Improvement to Bus Services’ award at the Awards in March.

26 Transport for London – Annual Report and Statement of Accounts 2009/10 Improving trams National Rail Oyster fares are zonally based, but are different from fares on TfL TfL is investing £28m in a major services. A combined TfL/National Rail fare programme of upgrades and maintenance is now charged for Oyster journeys that on London’s Tramlink network. incorporates both TfL and National Rail services. TfL is working with the Association During the summer, work was carried out of Train Operating Companies with a view to to replace track, points and drainage at East simplifying this fares structure. Croydon tramstop, which has suffered due to heavy traffic crossing. Passengers are now The expansion of Oyster pay as you go on experiencing smoother, faster journeys and National Rail has doubled the number of reduced noise levels. It has also enabled stations where it is accepted and has led to a a temporary speed restriction to be lifted. significant increase in the amount of people Across the tram network, the number of who benefit. Additionally, since January, a these restrictions has been reduced from 38 new Oyster rail map has been showing the in 2007 (before TfL’s acquisition) to just two. reach of Oyster around the Capital at all stations across London. Expanding Oyster To ensure people not travelling through More than seven million Oyster cards are Zone 1 pay the best value fare, new pink regularly used in London and last year Oyster route validators were installed at accounted for more than three billion key London Overground and Tube stations passenger journeys. More than 80 per in September. This has resulted in many passengers paying cheaper fares by touching cent of all Tube and bus payments in the in mid-way through their journeys, depending Capital are now made with Oyster. on the route they take. In November, Oyster pay as you go was The validators can identify those who have rolled out to river services. From 2 January avoided travelling through Zone 1 for journeys 2010, the ticketing system was extended to where there are several route options, and cover all routes within Greater ensure the appropriate fare is charged. London, particularly benefiting people living Passengers are still required to touch in and in the south and northeast of the Capital, out at either end of their journey. where previously Oyster had not been widely available. Passengers can now travel The new technology has been installed seamlessly across the network switching at Gospel Oak, Gunnersbury, Highbury & between Tube and rail services. Islington, Kensington Olympia, Rayners Lane, Stratford, West Brompton, Willesden A total of £40m was invested to install or Junction and Blackhorse Road, where upgrade equipment at every in passengers usually change trains or services. the Capital to deliver Oyster on National Rail. The extension has opened up a range of new journey opportunities as rail passengers travelling into and across London from other parts of the country now need just one ticket.

Supporting economic development and population growth 27 Better interchange Work continued across the transport network to improve access and interchange between services. 900 days of disruption were saved In November, TfL published its Interchange Best Practice Guidelines, which seek to by coordinating utility works at improve the quality of planning, design and a single site during 2009/10 operation of public transport interchanges. The new northern ticket hall at King’s Cross St. Pancras, which opened in November, exemplifies the principles outlined in the Smoothing traffic flow document and has enhanced passengers’ A number of activities took place during experiences when changing between trains 2009/10 to improve the road network, and other modes of transport. make journeys more reliable and improve Also in November, a new footbridge opened conditions for all road users. at Docklands Light Railway station making it easier to transfer between Major focus was placed on reviewing and National Rail services. Around 3,000 developing traffic control technology, passengers transfer from westbound minimising disruption from planned roadworks to Docklands Light Railway eastbound and unplanned events, plus ensuring effective platforms during the morning peak as part maintenance and improving TfL’s road network of their journey to the Canary Wharf area. and traffic signals. Previously, they had to go to street level London Streets reviewed 1,003 traffic signal to move between platforms. The £1.9m timings at sites across the Capital to ensure footbridge was funded with £1.65m from TfL their safe and efficient operation. This and £250,000 from the DfT’s Access for All included several major intersections, such as Small Scheme. , Hyde Park Corner, The bridge features a full-length canopy, Cross and Hanger Lane Gyratory. Across the lighting and CCTV coverage linked to the sites, delays were reduced by 5.9 per cent. Docklands Light Railway control centre; During the year, Split Cycle Offset ticket barriers for access to the c2c platform; Optimisation Technique (SCOOT) Oyster card validators for use when entering infrastructure was installed at 335 sites in the Docklands Light Railway platform; and London. The technology dynamically changes a step-free route to the westbound c2c signal timings to best suit traffic conditions platform from street level via a lift. using road sensors. SCOOT is already operating at around 2,000 signals, constantly re-phasing the lights to reduce stops and delays. Over the next five years, a further 665 traffic signals and, therefore, 50 per cent of London’s 6,000 signals will have the system

28 Transport for London – Annual Report and Statement of Accounts 2009/10 installed. In addition, 199 signal sites were Also, more than 900 days of disruption were modernised to include latest technology to saved by more than one utility company improve their resilience. working on a single site at the same time. Work also took place to develop and In February, a sixth utility company signed obtain approval for a new pilot scheme to up to the code which was strengthened to implement Pedestrian Countdown at traffic include new targets. It now covers almost signals. The system will help signalised 95 per cent of the works carried out on junctions operate more efficiently, by TfL’s roads. providing pedestrians with clear information about how long they have to cross the road. Both the code and the London Permit Scheme have had a positive impact on managing the Managing roadworks road network, but further plans include the possible introduction of a ‘lane rental’ scheme In November, TfL and 18 London to charge works promoters for occupation of boroughs received permission from space on TfL’s busiest roads. the DfT to introduce a common permit The scheme could allow companies to avoid scheme to ensure that any organisation charges in certain circumstances, for example wanting to dig up the Capital’s roads if works were carried out at times that were causes minimum disruption. less traffic-sensitive or they employed practices which enabled the carriageway to On 11 January, the London Permit Scheme return to traffic use at peak times. was introduced on TfL’s road network and to date, almost 12,000 permits have been TfL has worked with the DfT to help develop issued. In addition, TfL has been able to a scheme and plans to consult stakeholders reject around 1,800 permit applications in summer 2010, with a view to introducing which would have caused unnecessary new regulations in October 2011. disruption. In the same period, more than 240 days of disruption have been saved through companies working together. In April, the Mayor introduced a ‘Code of 1,800 Conduct for Roadworks’ aiming to smooth traffic flow and better manage roadworks. permit applications have been rejected by TfL The code’s signatories – the five main utility companies that carry out works on London’s preventing unnecessary roads – agreed to 10 key principles to help disruption from roadworks reduce delays and disruption associated with their roadworks. The code saw an increase in works undertaken outside peak hours and greater use of covers over excavated roads, which allowed the road to be used at peak times.

Supporting economic development and population growth 29 Managing incidents and events scheduled major events per year. These all require special planning, diversions and road In September, three key transport control closures which need to be communicated centres were relocated to one high-tech to motorists and other road users. The new hub. The new Surface Transport and centre puts TfL in a good position to move Traffic Operations Centre is now home forward with managing transport for major to the London Buses Command and events, including the 2012 Games. Control Centre, London Streets Traffic Additionally, in August, 20 new cameras Control Centre and the Metropolitan fitted with special image recognition Police Traffic Operation Control Centre. technology were installed at traffic hot spots across London. The cameras have The 24-hour hub is crucial for keeping the revolutionised how the Surface Transport Capital moving and the teams’ co-location and Traffic Operations Centre tackles allows them to control, monitor and police congestion as they automatically alert the London’s surface transport networks centre’s operators when traffic builds up, more effectively. The centre handles enabling them to identify situations and approximately 1,000 unplanned incidents take action much faster. The cameras have per month including traffic accidents and been positioned at known junctions where emergency roadworks, as well as around 750 congestion, even from minor incidents,

30 Transport for London – Annual Report and Statement of Accounts 2009/10 can build up on surrounding roads and using route 38 – a key service between significantly impact traffic, causing delays for Clapton and Victoria. Council all road users. carried out the works through its Living City programme in partnership with TfL. The total The new technology has been developed cost was £2.3m, with £1.3m being provided by TfL in partnership with Ipsotek Ltd. TfL by the council and £1m from TfL. is now looking at ways to expand its use to further improve conditions for the benefit of February saw the start of a £70m, three-year all the Capital’s road users. refurbishment programme in the northbound . Improvements include new Improving London’s roads fire and incident detection systems, better Major maintenance on the Gallows access for emergency services, new CCTV cameras, a communication system, and Corner flyover in east London was better lighting and ventilation. Works are being completed in July. carried out at night to minimise disruption. The essential safety works have significantly In December, the A40 Acton Bridges scheme extended the life of the flyover, which was in Ealing was completed with the opening of built as a temporary structure in the 1970s. the Perryn Road footbridge. The works, which They also minimise the need for any further began in October 2005, saw two old road large scale maintenance for at least a decade, bridges, which crossed four National Rail lines, contributing to smoother traffic flow and completely removed and replaced while the reduced congestion. A40 remained open. Wider footpaths and new Work on the A406 Hanger Lane in west segregated cycle lanes were created across London continued with the construction the bridges to further improve access around of foundations for two new bridges, as the the area. original Victorian structures were not built In December, substantial highway and urban for modern vehicles. Once work is complete, realm improvements were delivered to new road layouts will help improve traffic introduce the East London Transit, ahead flow. The construction and assembly of the of schedule and on budget. The project new bridges and the demolition of the old contributes to quicker journey times for bus ones is expected to be finished in early 2011. passengers, as well as smoother traffic flows As part of the project, new cycle lanes and for all road users. footways have been installed. More are still to be completed, and two new signalised pedestrian crossings will make the area more attractive and safer. The full scheme is currently scheduled to be completed by 1,000 summer 2011. unplanned traffic incidents per Work began in August on a new westbound month are managed by the contraflow bus lane to run between Surface Transport and Traffic Shaftesbury Avenue and Piccadilly Circus. Operations Centre It will particularly benefit bus passengers

Supporting economic development and population growth 31 Congestion Charging Phase 1 of a new online facility was launched in May, providing a one-stop shop for In November, the Mayor announced information about delivering freight into that he would make the Congestion London. Development of Phase 2, interactive Charge easier and fairer for the mapping and a Freight Journey Planner, is Capital’s motorists. under way. His proposals include a new automated Delivery Service Plans have been introduced to payment system, provisionally called CC increase operational efficiency of commercial Auto Pay, which will make it simpler to pay premises. By adopting this approach at its own the charge and, for those who opt in, bring an Palestra office, TfL has reduced the number of end to fines. deliveries by 20 per cent and shifted some to off-peak periods, cutting carbon dioxide (CO2) The automated system will mean that and saving money through reduced transport motorists who register for an account can and ordering costs. pay by debit or , or by direct debit, and avoid the possibility of ever receiving Construction Logistic Plans are also being a penalty charge. For these customers, the used to manage construction site deliveries daily charge will rise to just £9, as opposed more effectively and reduce journeys. to £10 for those who continue to pay through existing channels. Boosting river services Plans to integrate river services into The Mayor has also announced that the £1 fleet discount will be removed, which will the Capital’s transport network gathered mean fleet operators pay the same per vehicle pace in 2009/10. as customers using CC Auto Pay. The system More than 30 organisations, including will be introduced in January 2011, subject London’s pier owners, boat operators and to consultation. In addition, a consultation borough councils, signed up to the Mayor’s process will start on the proposal to remove river concordat, committing them to work the Western Extension in December 2010. together to reduce barriers to the growth of Freight river services. TfL continued to work closely with the Part of the concordat focuses on freight industry during the year. providing river commuters with the ease and convenience of Oyster, and Thames The Freight Operator Recognition Scheme went Clippers introduced Oyster pay as you go in from strength to strength. The free voluntary November. Additionally, improved signage initiative for freight users and operators aims and information at piers and railway stations to improve road freight transport standards is making the public more aware of river by providing its members with a range of services as an alternative to the Tube or train incentives. It now has 1,239 registered and explains the difference between fast depots representing 52,144 freight vehicles or ferries and leisurely cruises. 15.8 per cent of the commercially registered TfL and the ODA are providing £1.5m and vehicles in London and the South East. £250,000 respectively to extend Tower

32 Transport for London – Annual Report and Statement of Accounts 2009/10 Pier, a project that will be completed by ongoing development, including Canary Wharf, 2012. Opportunities to extend other piers, ExCeL and , has changed east London’s beginning in central London but eventually economy and the need to travel across the heading further east and west, will be Thames has increased significantly. explored with developers and pier owners. The review recommended further feasibility During October, a £269,000 deal was signed work on a package of projects including a between TfL, Council and or bridge crossing at . It also Clippers, which will secure river services suggested consideration of a new vehicle to for a further four ferry crossing at Gallions Reach with the years. The agreement means that current potential to move to a fixed link, and options service levels between the Woolwich Arsenal to upgrade the . and QEII piers will be maintained. It also acknowledges the importance to Londoners Other river improvements during the year of fast, frequent services and recognises the included the introduction of Thames river’s contribution to ongoing regeneration Clippers’ new direct river service between in the area. Canary Wharf and London Bridge. This now provides another transport option and more In July, TfL published a review of potential capacity for City workers. options for new east London river crossings, following the earlier cancellation of the There are also plans to introduce a full Bridge project. The City’s London 2012 Olympic and Paralympic Games river service (see page 68).

Supporting economic development and population growth 33 34 Transport for London – Annual Report and Statement of Accounts 2009/10 Enhancing the quality of life for all Londoners

TfLLondon’s is investing public millions transport to systemensure Londonplays a fundamental is prepared part in forimproving estimated the populationquality of life and for workforce all. growth – 800,000 and 400,000 people respectively by 2021.

The cycling revolution for 24 hours, rising to £45 for annual access, will be charged. The first 30 minutes of every A host of initiatives took place during trip are free, then charges range from £1 for a 2009/10 to progress the Mayor’s journey of between 30 minutes and one hour, pledge to create a cycling revolution up to £50 for 24 hours. in the Capital. In June, the Mayor also announced plans for Around 500,000 daily bicycle journeys are 12 Cycle Superhighways, which will provide now made in London, up nine per cent safer, faster and more direct cycle routes into in the year since the Mayor was elected. the city from Outer London. Two pilot routes Additionally, record funding has been will open in summer 2010 – from Barking to invested in a number of major projects Tower Gateway and Merton to the City. to encourage further take-up. The routes will be clearly marked and easy to A new scheme to provide the Capital with follow with bespoke signs and road markings. 6,000 hire bikes will go live in July 2010. There will also be information about journey The bikes will be available 24 hours a day, times and links to other cycle routes. The all year, from up to 400 central London bold markings will increase awareness among docking stations, positioned roughly other road users, and make it clear that the every 300 metres. The stations will have route is used by lots of cyclists. local route information and cycle times More than half of the trips in the Capital that to key destinations. could be made by bicycle take place in Outer The affordable hire system aims to make short London (2.4 million journeys a day), with trips in central London faster and simpler. It most being made by car. is expected to generate around 40,000 daily A key mayoral priority is to increase cycling cycle journeys in the area and remove many in these Outer London boroughs and in of the barriers to cycling, such as access to January, 13 were selected to become ‘Biking a bicycle, secure cycle parking, fear of theft, Boroughs’. Each one was awarded £25,000 maintenance and storage. to fund a local study examining how cycling Serco will operate the scheme on behalf of could be developed in their areas. TfL. An access fee, starting from as little as £1

Enhancing the quality of life for all Londoners 35 36 Transport for London – Annual Report and Statement of Accounts 2009/10 A new eight-week initiative to encourage more people to cycle to work was launched by the Mayor and TfL in August. Called Cycle Fridays, it was primarily for the novice 65,000 commuter cyclist, and involved led rides cyclists enjoyed traffic- by experienced riders, departing from six free roads at the Mayor of locations across the city and travelling into London’s Skyride central London every Friday. Those taking part were greeted by marshals and received a basic bike check and TfL cycle maps before taking to the road. The boroughs are Barking & Dagenham, Bexley, Brent, Bromley, Croydon, Ealing, The final leg of the Tour of Britain, on 19 Haringey, Havering, Hillingdon, Hounslow, September, brought 96 of the world’s elite Kingston, Merton and Redbridge. cyclists to London. It was the sixth time the Capital had been involved in the Tour, which More parking facilities for cyclists were rolled is the largest, free-to-attend sporting event out during the year. At Euston station 138 in the country. The race will finish in the city additional cycle parking spaces were installed again in 2010 and 2011. and TfL funded new ‘two-tier’ bike racks at , which increased The Mayor of London’s Skyride, on 20 parking from 116 to 233 spaces. By 2012, September, proved popular with around TfL aims to have provided 66,000 new cycle 65,000 cyclists enjoying traffic-free access parking spaces across the city. to central London roads. Also, a Skyride was held in Hounslow in August, which attracted A host of events took place during the 11,000 cyclists. There are plans to hold more Mayor’s and TfL’s Summer of Cycling mass events in Outer London during 2010. campaign, designed to encourage more people to take to two wheels. Plans for pedestrians As part of the initiative, workplaces were TfL’s Legible London pedestrian encouraged to take part in the London Cycle information system was extended to Challenge. The web-based competition new areas of the Capital during 2009/10. encouraged individuals and the Capital’s workplaces to cycle more during the month First launched in 2007 in Bond Street, of June and compete to see who could cover Legible London’s maps and signs make it the most miles. More than 5,400 people easier for people to navigate on foot and from over 250 businesses got involved, encourage them to walk more. double the participation levels in 2008. The new areas are: Bloomsbury, Covent This year the Cycle Challenge was also Garden and Holborn; Southbank and introduced to schools, with some 300 pupils Bankside; plus Richmond and Twickenham from 19 schools taking part. Combined, town centres. Legible London maps have participants managed to clock up 948,689 been integrated into customer information at miles – equivalent to cycling around the Tube stations and bus stops in these areas. world 38 times.

Enhancing the quality of life for all Londoners 37 A busy part of the West End has also been five new street/cycle crossings which allow transformed with £2.4m from TfL. The much easier access for cyclists and people funding has created a walking route, which on foot. As part of the project, the busy runs from to Holborn Circus, Oxford Street crossing was modernised and and a new public space at Great Queen more than 300 metres of guardrail removed. Street. The area has been further improved, Additionally, a cycle link was introduced into making more space for pedestrians, by Hyde Park to connect with the Broadwalk removing unnecessary street clutter, cycle route. All but two subways have been including some traffic signals and guard rails. closed to the public – those which remain open are specifically to access The improvements, unveiled in January, are Underground station. part of the Mayor’s policy of ‘Making Walking Count’ and are designed to get more people During a five-day period when both the walking. There are also facilities to encourage old subways and newly commissioned cycling and the use of electric vehicles. pedestrian crossings were accessible, more than 190,000 people used the new In May, Marble Arch’s pedestrian alternative routes and there was an 85 per improvement scheme was successfully cent reduction in subway use. completed. Subways were replaced with

38 Transport for London – Annual Report and Statement of Accounts 2009/10 In March, a £6m facelift of Woolwich town In June, almost 800 responses were received centre was completed, making it safer for to a consultation on proposals to improve pedestrians, cyclists and road users. The the Henlys Corner junction in north London. work was carried out in partnership with A total of 85 per cent of people agreed or Greenwich Council and benefits include strongly agreed with the need to improve the wider pavements and more space to reduce junction. The plans will provide controlled crowding at bus stops. crossings for pedestrians and cyclists, while smoothing traffic flow, through better In November, ’s Brixton Hill traffic management. TfL has carried out site Gyratory was removed and the road returned investigations, published an Official Journal to two-way traffic. The removal was part of of the European Union (OJEU) notice and is TfL’s Brixton town centre improvement work, finalising the design. Providing consents are which has already seen pavements widened, obtained, construction will start in early 2011. new signalised pedestrian crossings and improvements to bus lanes. Also, as part of In July, a new foot and cycle bridge opened the project to redevelop Brixton town centre, at Bedfont Road in Hounslow. Built alongside a new public square opened in February, the existing road bridge, the £950,000 specifically designed for the community to structure provides safe and easy access for use for cultural activities and events. This pedestrians and cyclists travelling between attraction will contribute to the regeneration Bedfont and , to the west of the of the area and improve quality of life for borough. The existing bridge had no paths for local people. pedestrians and cyclists shared the narrow road with other traffic. In July, work began on a £7.6m improvement scheme for town centre. The A six-week consultation, including a public works, around the Gants Hill roundabout, exhibition, took place during October and have been developed in consultation with November on proposed changes to the Redbridge Council and will introduce trees Gyratory in north London. and grassed areas to revitalise the site. New Plans include converting the system to two- pedestrian crossings, a pedestrian walkway/ way traffic, improving facilities and access for cycleway, wide footways, plus seating and pedestrians and cyclists, reducing the volume cycle parking will also be installed. TfL will of traffic on Broad Lane, constructing a larger contribute £5.4m towards the scheme, which bus station and introducing more convenient complements Redbridge Council’s plans bus stops. This project is essential to to improve central Gants Hill through new underpin proposed local urban regeneration. housing and business opportunities. The work Additionally, a new public square would be is due to be completed in summer 2010. created at .

Enhancing the quality of life for all Londoners 39 40 Transport for London – Annual Report and Statement of Accounts 2009/10 A New Bus for London Tackling pollution and During June, TfL announced that six improving air quality manufacturing companies had qualified In March, the Mayor published his draft to bid for the contract to design and Air Quality Strategy which sets out plans build the New Bus for London, following to tackle pollution in the Capital. the announcement of the winning Called ‘Clearing the Air’, it highlights designs in December 2008. measures and actions required to meet legal Detailed specifications were sent to the obligations to reduce air pollutants, such as chosen companies inviting them to submit particulate matter (PM10) and nitrogen dioxide proposals for the new bus, including outline (NO2). London is on target to meet PM10 designs which incorporate an open platform, legal limits by 2011, and proposes measures green technology and accessibility features. to further reduce NO2 concentrations by 2015. However, the strategy highlights that In January, Wrightbus was named as the additional Government action would be successful bidder and the process of finalising required to help London meet these limits. the design and building the bus began. Public consultation will begin shortly on the The new buses will be 40 per cent more fuel Mayor’s proposal to include the oldest and efficient than conventional buses and 15 per most polluting, heavier vans and minibuses in cent more efficient than hybrid buses. They the Low Emission Zone (LEZ). This requires are expected to hit the Capital’s streets in drivers of vehicles not meeting LEZ emission early 2012. standards to pay a daily charge to drive in the zone, which covers the Greater London area. Also in March, the Mayor announced proposals to introduce age limit restrictions for taxis and private hire vehicles to ensure the most polluting of these are removed from the Capital’s roads. Additionally, there are plans to develop an affordable black cab, by 2015, that emits 60 per cent less pollution and a zero-emission black cab by 2020. This work is being done with the vehicle manufacturing industry.

Enhancing the quality of life for all Londoners 41 Improved trains In October, the first of a fleet of 191 new, air-conditioned ‘S-stock’ Tube trains for the Circle, District, 47 Hammersmith & City and Metropolitan new Tube trains will be lines arrived in the Capital. It is due to introduced on the Victoria line enter service on the Metropolitan line in summer 2010.

The new trains are one of a number of Recycling measures that will improve passengers’ travelling experience in warmer weather. Discussions were initiated this year with the boroughs to locate recycling bins New air-conditioned Overground trains also began running on the London Overground outside bus stations. network. The trains feature state-of-the-art The majority of London’s free newspapers information displays and announcements, on that are distributed on or around the network board CCTV and improved security due to are taken away by passengers or are left on better layout and clearer sightlines through vehicles. Bus operators recycle waste left the carriages. on board but the amount generated at bus Similar to those on the Tube, they have more stations is not enough to justify installing flip-down seats which provide extra standing recycling bins for public use. room for hop-on, hop-off journeys. They also have more capacity than the previous models (see page 24). As part of the Victoria line Tube upgrade, the first of 47 new trains was introduced into passenger service during July. They have nearly 20 per cent more capacity and feature in- carriage CCTV, improved wheelchair access, better ventilation, plus enhanced visual and audio customer information systems.

42 Transport for London – Annual Report and Statement of Accounts 2009/10 Enhancing the quality of life for all Londoners 43 44 Transport for London – Annual Report and Statement of Accounts 2009/10 Improving the safety and security of all Londoners

Across the Capital’s transport networks, crime levels are down while the public’s perceptions and confidence continue to improve.

Tackling crime In August, a 12-month trial saw 20 new Travel Safe Officers deployed on London During 2009/10, bus-related crime fell Overground services. The officers will, in by more than eight per cent – a six-year time, have the power to issue penalty notices low. The total number of incidents was for disorder offences such as , criminal 24,976 compared with 27,170 the damage or littering. They will also be able previous year. to take the names and addresses of people behaving unacceptably on the network and Crime levels also fell on the Underground forward them to the police. and Docklands Light Railway – from 15,109 The officers will liaise closely with the British in 2008/09 to 14,536 in 2009/10. There are Transport Police’s (BTP’s) Neighbourhood now 12,000 CCTV cameras across the Tube Policing Teams, which already work on the network with the figure due to rise to 14,000 Overground and provide an extra deterrent in the coming years. There are also 1,500 to unacceptable behaviour. Other safety Help points. improvements have included staff at stations The 32 dedicated Transport Hub Teams, during operating hours, enhanced lighting and launched in 2008/09, continue to provide a repairs to CCTV equipment. New trains also highly visible presence in specific problem have clear sightlines right through the carriage areas and work closely with local Safer and on board CCTV monitored by the driver Transport Teams. has been designed to increase passengers’ sense of safety. Further security upgrades In July, a joint 12-month trial between TfL will see more Help points and cameras at all and Croydon Council gave travel passes to stations by 2011. 14 Neighbourhood Enforcement Officers In November, TfL and the Metropolitan in the area, plus four additional council Police Safer Transport Command carried out staff, so they can use buses while on patrol. targeted patrols across the Capital as part The initiative will help TfL and Croydon of a four-week operation called Safebus. Council work together to deploy resources The initiative aimed to provide reassurance in the best possible way to deter crime and to passengers during the Halloween and antisocial behaviour. bonfire night period, when bus-related crime traditionally increases by 20 per cent.

Improving the safety and security of all Londoners 45 Road safety Motorcycle awareness In December, an 18-month trial began in In September, a TfL road safety campaign , north London, to reduce urged drivers to ‘give motorcyclists a road casualties and smooth traffic flow. second thought’. The speed limit was lowered from 30mph to The initiative aimed to cut the number of 20mph on the section of Camden motorcyclists killed or injured on London’s High Street and new traffic light timings were roads and its TV ads warned of a dangerous introduced to help enforce it. Three sets of optical effect, caused by the way the brain existing traffic lights are now phased so that assesses approaching objects. Psychologists vehicles observing the speed restrictions believe this could put motorcyclists at risk, should be able to pass through all green particularly when drivers turn right, as it leads traffic lights on the road. If drivers exceed them to underestimate the time that small 20mph, they will be caught in the red light vehicles take to reach them. phase, which will slow down traffic. Tests using footage of vans, cars and The trial is the first of its kind on the TfL motorcycles approaching at identical speeds road network. It is being introduced because showed that the participants regularly Camden High Street has almost double estimated that motorcycles would take the number of collisions of other borough longer to reach them than larger vehicles. A-roads, with 11 people seriously injured in the past three years. TfL will monitor the trial Last year there were 4,890 incidents in Greater to assess the impact of the 20mph limit. The London where motorcycles and/or scooters results will help determine whether it should were in collision with other road users. Of be enforced permanently. these, 848 resulted in a death or serious injury. In January, average speed cameras started In February, a new team of 12 full-time police to be installed on a dangerous stretch of officers was created to reduce motorcycle the A13 in east London for a trial expected casualties in the Capital. The London to halve deaths and serious injuries when it Motorcycle Policy Unit, set up in partnership goes live in summer 2010. with the Metropolitan Police, runs one- day, practical training sessions, under the The 12km stretch between Canning Town and banner ‘BikeSafe-London’. The courses are the Goresbrook Interchange is the first major helping to make motorcyclists safer and urban road in the UK to use average speed better riders by improving their knowledge, cameras to enforce the speed limit. A total of 84 skills and experience. The team also carries cameras, based at 37 locations, will be used. out on-street enforcement to ensure that the motorbikes on London’s streets are The collision rate on this part of the road is roadworthy and legal. around a fifth higher than is typical of major roads in London. Nearly 500 collisions, To coincide with clocks going forward in including three fatal and 34 serious March, scooter riders were also urged to accidents, were recorded on the stretch sign up for the ScooterSafe initiative. The between 2006 and 2008. Half of those were scheme’s one-day courses provide the caused by speeding. opportunity to develop riding and awareness

46 Transport for London – Annual Report and Statement of Accounts 2009/10 skills with the aim of reducing deaths and of key road user and cycling organisations. It serious injuries. was sent to approximately 100,000 cyclists across the city to obtain their views, and the Cycle safety final plan was published in March 2010. The number of cyclists killed or seriously A new report from TfL revealed that, between injured on London’s roads has fallen by 2001 and 2006, the most common type of 24 per cent compared to the mid to late- cyclist fatality in London involved a large 90s, despite a 117 per cent increase in vehicle changing lanes to the left or turning cycle journeys on major roads during that left. The Mayor is calling on freight companies operating in the Capital to fit side-guards time. Since 2008, cyclist fatalities and on their vehicles, or other devices such as serious injuries have been reduced by safety mirrors, to ensure that cyclists remain three per cent (445 to 433 in 2009). in clear view of drivers. Currently, operators are exempt from fitting them, but research In November, the Mayor released his draft has shown they might have helped prevent Cycle Safety Action Plan and invited London the deaths of 15 out of 23 cyclists during boroughs and cycling groups to comment those years. The Mayor has also asked the on it. The document highlighted a number Government to revoke the exemption and of proposals to improve cyclists’ safety change the law so that all heavy goods including boosting training, working with vehicles weighing more than 3.5 tonnes, freight operators, championing safety trials regardless of age, should have additional and creating a Cycle Safety Working Group

Improving the safety and security of all Londoners 47 Don’t let your friendship die on the road Look out for your mates

48 Transport for London – Annual Report and Statement of Accounts 2009/10

DR.12.indd 1 27/2/09 14:49:01 safety mirrors fitted. TfL has approached the Teen road safety DfT to discuss a trial of safety mirrors at traffic lights along the planned Cycle Superhighways, In June, TfL teamed up with social to improve visibility of cyclists for drivers of networking site Bebo for an initiative large vehicles. aimed at reducing teen road deaths and injuries. In July, TfL’s website (tfl.gov.uk) premiered a five-minute film aimed at helping cyclists and The site’s popular online drama ‘Sofia’s lorry drivers navigate London’s busy roads, Diary’ ran a storyline in which the star re- and each other, safely. It showed both cyclist evaluated her attitude to road safety when it and driver viewpoints and outlined a series directly affected someone close to her. The of golden rules to ensure both stay safe on plot added momentum to TfL’s most recent the roads. The film was sent to more than teen road safety campaign, ‘Think! Look out 140,000 London cyclists and lorry drivers. for your mates’. A full-length version was also circulated to haulage companies and road safety officers, In October, a campaign was launched to in addition to being available online. advise teenagers to take care on or near roads as the seasons change and evenings Although the number of adults receiving draw in. Research has revealed that, between cycle training in the Capital has nearly 2006 and 2008, a quarter of all collisions doubled in the past two years, new TfL involving teens took place from October to research showed that only one in 10 December. They typically occur on weekdays Londoners and just three in 10 of the city’s at peak times when young people are cyclists have had cycle training. TfL is travelling to and from school. working hard to promote the free and low- cost training provided by many borough As part of the campaign, limited edition councils. Sessions are individually tailored reflective wristbands with the slogan and enable the cyclist to deal with a wide ‘Think! Don’t let your friendship die on the range of traffic conditions. road’ were given out at concerts and youth centres. They encouraged teens to stay In addition, TfL is investing in training visible and subtly reminded them about the related to the Cycle Hire Scheme and importance of road safety. Cycle Superhighways to supplement the programme and support new cyclists. Don’t let your 140,000 friendship die cyclists and lorry drivers on the road received TfL’s freight safety film Look out for your mates

Improving the safety and security of all Londoners 49

DR.12.indd 1 27/2/09 14:49:01 Raising awareness Safer cabs In April, new TfL research revealed that TfL continued to alert people to the eagerness to impress friends could be a dangers of travelling in illegal cabs significant factor in collisions involving and launched a new wave of the Safer young drivers. Those aged 17 to 25 Travel at Night campaign to coincide account for eight per cent of London‘s with the Christmas party season. drivers, but are involved in 18 per cent The initiative, which warns against using of collisions. unbooked minicabs, featured a powerful TV The report revealed the extent to which and cinema advert reminding passengers that young drivers, particularly males, are affected getting into any minicab without booking can by peer pressure. Thirty-one per cent of pose a serious risk of sexual assault. respondents said they had been urged to The joint campaign between TfL, the speed by friends, with one in three males Metropolitan Police and the and one in five females risking losing their Police, was launched six years ago. Since licence by speeding to impress others. This then the number of women willing to take was despite a third of respondents claiming illegal cabs has dropped by almost 80 per they would not be able to maintain their cent, while the number of cab-related sexual lifestyle, including their job, if they lost their offences has almost halved. However, a driving licence. The findings were released small but significant number of younger to support a joint campaign by TfL and the women continue to use illegal cabs despite London Safety Camera Partnership, which the dangers they present. warns young people about the consequences of illegal driving. In 2009/10, the DfT launched a TV, poster and online campaign after new research showed that one in 10 young male drivers admitted driving after taking illegal drugs. It 5,500 also showed that one in five drivers killed in arrests have been made by the road accidents may have had an impairing Metropolitan Police Cab drug in their system. TfL worked on a regional campaign which highlighted the fact that Enforcement Unit since 2003 police can tell if someone is driving under the influence of drugs, as illegal substances have an involuntary effect on the eyes. The campaign warned that the consequences Safety was also boosted throughout of being convicted of drug-driving are the the campaign with increased night-time same as for drink-driving – a minimum 12 operations by the Metropolitan Police’s Cab months driving ban, a criminal record and a Enforcement Unit, part of the TfL-funded fine of up to £5,000. Safer Transport Command. In addition, Safer Transport Teams carried out a number of

50 Transport for London – Annual Report and Statement of Accounts 2009/10 local operations. Since 2003, the unit has Bromley, Beckenham, Kingston and made around 5,500 arrests for touting and in Outer London. cab-related offences. In September, TfL announced plans to The campaign also promoted TfL’s Cabwise tighten guidelines for licensing taxi and service. It provides people who text ‘CAB’ private hire drivers in the Capital. In future, to 60835 with the numbers of two local, licences will not be granted to applicants licensed private hire companies and one taxi who have been convicted of serious (black cab) firm. or violent offences, unless there are exceptional mitigating circumstances. TfL continued to work with the boroughs to provide late-night marshalled taxi ranks. These are now set up in Liverpool Street and Haymarket in central London, and

Improving the safety and security of all Londoners 51 52 Transport for London – Annual Report and Statement of Accounts 2009/10 Improving transport opportunities for all Londoners

TfL’s aim is to address the physical, financial, or communication barriers, whether real or perceived, that prevent people from using public transport in the Capital.

Visitor Oyster In October, TfL launched an online visitor shop in partnership with Visit Britain, which TfL has re-enforced its commitment to has received 600,000 hits and produced help people visiting the Capital by revenue of more than £500,000. forming a number of new partnerships to A number of other strategic partners sell Visitor Oyster cards. currently sell Visitor Oyster cards including This includes a partnership with easyJet, the Visit London, coach UK’s largest airline, which in July became the services, , , first company to sell the cards on London- Oxford Tube coach services, and bound flights. More than 40,000 have been Superbreak. They are also available at a sold generating revenue of £800,000. number of overseas travel agents. TfL has also worked with Air Southwest to sell Oyster for young people Oyster cards on board flights into London. In addition, a marketing campaign by Docklands Young people who have their Oyster Light Railway encouraged passengers to pre- photocards (known as Zip) withdrawn buy Oyster cards to reduce their queuing time due to bad behaviour can now get them at stations. back through voluntary community work. In June, a deal was signed with Train The initiative, called Earn your travel back, Operating Company First to sell Visitor began in September. It invites youngsters to Oyster cards on board Wrexham & Shropshire contact v (the National Young Volunteers services into London Marylebone. Service), which will arrange for them to take Visitor Oyster cards work in the same way part in a day’s work for either BTCV (formerly as other Oyster cards and offer passengers the British Trust for Conservation Volunteers) quick and easy access to TfL services the or the London Wildlife Trust. moment they arrive in the Capital. They have Building on the Zip scheme introduced pre-loaded credit limits, dependent on the in 2008, it aims to deal with young people organisation retailing the card. who lose their concession because of consistent bad behaviour, such as bullying,

Improving transport opportunities for all Londoners 53 using threatening language or defacing equality and ensure that its activities meet Oyster cards. Those who have their cards the needs of disabled and deaf people over taken away due to criminal behaviour are the next three years. not eligible. The scheme builds on improvements already Also this year, an online facility was made. New links and extensions now provide introduced to enable young people to change Londoners with more opportunities to the photo on their Oyster card for a £10 fee. travel to jobs and leisure facilities across the Capital. All Tube station refurbishments Accessible networks include measures to improve the journey experience of disabled, hearing and visually In November, TfL published its revised impaired people. Wide-aisle gates, tactile Disability and Deaf Equality Scheme strips and colour-contrasting handrails all document, which sets out plans to enable more confident, independent travel. continue improving travel choices for TfL plans to take forward these principles disabled and deaf people who live, visit with the new Crossrail stations. Twenty-eight or work in London. of its 37 stations will be step-free, including all interchanges. Trains will have wide doors Around 18 per cent of Londoners are with dedicated spaces for wheelchairs, plus disabled or deaf and the scheme’s action enhanced audio-visual information. plan indicates how TfL will promote disability

54 Transport for London – Annual Report and Statement of Accounts 2009/10 Travel support The initial consultation on the new London Permit Scheme led to the 17 inclusion of a section to ensure the languages have been installed needs of disabled and visually impaired on all Tube station touch pedestrians are taken into consideration screen ticket machines when it is necessary to work on footpaths or alter road crossings. In August, TfL launched a search for Step-free access volunteers to test its new Travel Support Card. Designed for people with hidden disabilities A total of 59 Underground stations are such as autism and learning difficulties, the now step-free from street to platform scheme aims to give them greater confidence with work completed this year at to ask for help while using the public transport Edgware, High Barnet and Hainault. network. When passengers show the card, members of staff will recognise that they may Step-free access to the Piccadilly and need extra support. Victoria lines at King’s Cross St. Pancras was also finished. The station will become fully In June, as part of TfL’s Investment step-free in summer 2010 when lifts serving Programme, all touch screen ticket machines the Northern line platforms are installed. The at Tube stations were upgraded with 17 number of step-free stations will rise further languages, making life easier for London’s over the next few years, when works to diverse communities and overseas visitors. provide step-free access will be focused on a Machines in every station now have Arabic, number of major interchange stations. These Bengali, Chinese, Greek, Gujarati, Hindi, include Victoria, Tottenham Court Road and Polish, Punjabi, Tamil, Turkish and Urdu Bond Street. options. London Underground is one of the world’s leaders in providing a large range of language translations and the updated ticket machines will help maintain the Capital as a city proud of its cultural diversity.

Improving transport opportunities for all Londoners 55 56 Transport for London – Annual Report and Statement of Accounts 2009/10 Enhanced passenger initially for 12 months and, if successful, will be extended. The move complements information TfL’s extensive range of online Travel Tools The roll-out of the iBus information available at tfl.gov.uk. These include a travel system was completed in April. Now information status board, plus free text and email alerts which Londoners and visitors can all 8,500 London buses carry the use to work out the quickest way to get from state-of-the-art technology which A to B while on the move. informs passengers of their next stop Two travel information centres opened in and final destination. the Capital during 2009/10. In September, It is designed to help people travel a larger, accessible travel centre opened confidently, especially when visiting at Euston mainline station, and in March, unfamiliar parts of the city, and is of another opened in King’s Cross St. Pancras particular benefit to hearing or visually station with a team of 15 staff. The new impaired people. additions bring the number of centres to six, all providing a one-stop shop for advice In the next two years real-time passenger about transport services. This includes information will be transformed with bus information about fares and tickets, visitor arrival times at all 19,000 bus stops available attractions, theatres and sightseeing tours. to people by internet and mobile phone. Last year, the centres helped more than two In addition, new Countdown signs will million customers. provide arrival time predictions at 2,500 key stops. The mobile and web information Door-to-door services should be available in early 2011, with the roll-out of new Countdown signs following Dial-a-Ride, the door-to-door service for later in the year. Londoners unable to access mainstream public transport services, continued to In February, TfL added an online bus information tool to its website build on improvements. (tfl.gov.uk), providing passengers with A total of 1,254,746 trips were completed – detailed information about bus services an increase of 76,424 (6.5 per cent) from the across the Capital. People can search previous year and for every 100 bookings 92 for information using a postcode, street trips were successfully scheduled. Demand name, route number or place of interest. for the service increased by 5.7 per cent The facility will then display the nearest compared to the previous year. bus stops, details of routes that call at a particular stop, plus the current timetables. In October, a new telephone system was introduced to better manage calls to the In July, TfL formed an innovative partnership booking centre. The system will be further with Coca-Cola Great Britain to display up- enhanced to enable self-service booking to-the-minute Tube travel information on facilities for customers, which is expected its famous Piccadilly Circus sign, which is to go live in July 2010. located in the heart of the Capital’s shopping and theatre district. The partnership is

Improving transport opportunities for all Londoners 57 58 Transport for London – Annual Report 2009/10 Reducing transport’s contribution to climate change and improving its resilience

Ground-based transport accounts for around 22 per cent of London’s CO2 emissions. Work continues to help meet the Mayor’s target of reducing the Capital’s emissions by 60 per cent from 1990 levels, by 2025.

TfL’s Climate Change Fund By 2012, it is planned that 300 hybrid buses will be running on London’s streets. In March, This was set up in 2007 to provide TfL announced that Volvo and Alexander £25m over three years to deliver climate Dennis Limited (ADL) would manufacture change mitigation above and beyond the latest batch of 50 vehicles, following an existing plans. award from the DfT’s £30m Green Bus Fund. The fund has supported projects that During October, the ODA granted planning demonstrate the most potential for permission for a hydrogen refuelling facility influencing markets and promoting to be built in east London, enabling TfL to behavioural change. By March 2010, nearly bring five zero-emission hydrogen fuel cell £22m had been allocated to 12 programmes. buses to the Capital. The plant is expected to be completed by Greener buses summer 2010 and the buses are due to join The operational and technical TfL’s fleet next year, running on route RV1 evaluation of 56 hybrid buses from four between Covent Garden and Tower Gateway. manufacturers continued. Hydrogen buses emit nothing but water Hybrid buses are powered using the vapour and help improve air quality and combination of an ordinary diesel engine and reduce traffic noise. TfL has recieved an electric motor. They achieve around 30 additional EU funding to increase the per cent fuel efficiency compared with diesel hydrogen bus fleet to eight. buses, and emit less CO2, NO2 and carbon monoxide. Other benefits include a three decibel reduction in perceived sound levels and regenerative braking – a recycling system that uses braking energy to power the motor.

Reducing transport’s contribution to climate change and improving its resilience 59 Electric vehicles agreements will allow for a list of approved suppliers to be set up, which will make it The Mayor’s intention to make easier and cheaper for TfL to buy points London the electric vehicle Capital of and vehicles. These suppliers will also be Europe gathered pace with detailed available to other public and private sector plans launched in December that will organisations to allow them to progress dramatically increase the number of take-up of electric vehicles quickly and for less money. electric charge points in the city. Additionally, TfL is working to launch a one- By 2015, every Londoner will live less than stop website for electric vehicles during 2010 one mile from a charge point, with 22,500 to provide information and details of the at workplaces, 500 on streets and 2,000 in London-wide scheme. public car parks. A network of accessible, faster charge points will also be installed at Sustainable buildings key locations on the road network and at motorway service stations. The plans aim to During 2009/10, a range of energy- support the mainstream use of zero-carbon saving improvements began at 22 emission electric vehicles. TfL head offices, as part of the In March, TfL published details of how the organisation’s Building Energy Efficiency electric vehicle revolution will be achieved. Programme (BEEP). Two notices were placed in the OJEU The scheme, which is being rolled out across to create the UK’s largest procurement 42 of the ’s (GLA’s) frameworks (worth around £70m) for electric public buildings, with a further 58 in the vehicles and charge point infrastructure. The

60 Transport for London – Annual Report and Statement of Accounts 2009/10 pipeline, includes installing solar panels, The move is a key part of TfL’s property improving draught proofing and ensuring that strategy to improve the overall quality and electricity voltage is delivered at the most productivity of its workspace, while still efficient level. achieving significant efficiencies. As part of the innovative programme, energy In February, a £2.4m combined heat and companies guarantee a set level of energy power plant, which includes the UK’s biggest (and therefore financial) savings, which hydrogen fuel cell inside a building, began allow organisations to fund investment providing energy for Palestra, TfL’s office in in improvements. The risk of introducing Southwark. Financed by the £25m TfL Climate efficiency measures is greatly reduced by Change Fund, the system generates energy having the companies guarantee the savings. locally, and aims to cut carbon emissions by up to 30 per cent and save £90,000 off bills. The work at TfL has been pivotal in the At times of peak energy use, the building creation of a national BEEP framework, generates a quarter of its own power, rising to which provides a commercial model for 100 per cent off-peak. The waste heat from public bodies to finance energy efficiency power generation is pumped into a unit on the improvements to their buildings. It is roof which supplements six electric chillers anticipated that if successfully rolled out and keeps the building cool. to public buildings, it could be modified to function within the private sector. To communicate the benefits of hydrogen and the fuel cell, a permanent exhibition When the programme is complete, more display was created at Palestra which is than 70 energy efficiency projects will save powered by the energy generated on site. £555,000 and stop 2,500 tonnes of CO2 being released each year. Also in February, TfL signed-up to the 10:10 commitment. This pledge aims to cut carbon In summer, 1,800 TfL staff moved into new emissions from head office buildings by premises at 14 Pier Walk, the first new building 10 per cent between 1 April 2010 and 31 to be completed at the major development March 2011. An estimated £400,000 will be at next to . saved from head office energy bills during The building has received an ‘excellent’ the period, which will be reinvested in more rating for its energy efficiency and water and energy-saving projects. waste management by the internationally recognised BREEAM standard, the leading and most widely used environmental assessment method for buildings. A ‘living roof’ has been installed at Pier Walk to help boost local ecology, improve 2,500 insulation and limit the flood impact from tonnes of CO2 will be saved rainfall. Inside, kitchen work surfaces are made from recycled glass that originally each year by more than 70 started life as windows on 1967 Victoria line energy efficiency projects Tube carriages.

Reducing transport’s contribution to climate change and improving its resilience 61 62 Transport for London – Annual Report and Statement of Accounts 2009/10 TfL is a founding member of the Better All London Buses’ roadside ticket machines, Buildings Partnership – a collaboration of plus 3,500 solar powered bus stops and 640 London’s leading commercial property shelters, have LED lighting. owners and organisations, which is supported by the Mayor. It aims to develop solutions Smarter travel to improve the sustainability of London’s In March, the third and final Annual existing commercial buildings and produce Report on the Smarter Travel Sutton CO2 savings to achieve the Mayor’s target of a 60 per cent reduction by 2025, from 1990 scheme was published. It revealed the levels. TfL is also part of Green 500, which scheme has helped achieve a 75 per cent sets out to enlist some of London’s largest increase in cycling in the borough since organisations, and mentor them through their its launch three years ago. carbon reduction commitments. TfL worked in partnership with the London In June, TfL won three awards at the first Green Borough of Sutton to deliver the scheme, 500 and Better Buildings Partnership awards: which sets out to encourage residents to the gold portfolio award for carbon efficiency travel by public transport, on foot or by bike. at its head office buildings; gold standard Other highlights included a six per cent drop under the Green 500 scheme; and a special in the proportion of residents’ journeys made commendation for the Palestra project. by car, plus an increase in bus travel. Also this year, TfL was awarded for its energy In addition, all 68 Sutton schools had a travel saving credentials as a client at the CIBSE plan in place by March 2008, two years ahead Low Carbon Performance Awards. Its head of Government targets. office buildings also received the Carbon Trust Standard in March, which recognises The two-and-a-half-year Smarter Travel commitment to carbon reduction. Richmond upon Thames programme began in April. Activity included the introduction Energy saving lights of 700 on-street cycle stands, 105 car club In August, the Mayor announced bays, the launch of two travel plan networks for businesses, and a roadshow event investment of £2.4m from the TfL attended by around 30,000 residents. Climate Change Fund for thousands of new energy saving lights in traffic signals. Work began with local schools to deliver coordinated school travel planning and The lights cut CO2 emissions and last about 10 times longer than standard bulbs. A total of 3,500 traffic signals at around 300 junctions will be fitted with them, saving 600 tonnes of CO2 a year and around £200,000 in energy 700 costs. These benefits are estimates, and on-street cycle stands a technical evaluation currently under way installed as part of Smarter will verify the savings. TfL is now seeking organisations to supply and fit the lights. Travel Richmond

Reducing transport’s contribution to climate change and improving its resilience 63 safer routes engineering schemes. The London Underground’s staff-led Energy number of adults in Richmond aware of Station Challenge is estimated to have Car Clubs increased from 12 to 61 per cent reduced CO2 emissions by 5,500 tonnes in and membership more than doubled the last three years, saving around £700,000. to 2,700 following a targeted advertising campaign. Other results have also suggested The use of regenerative braking on new an increase in levels of walking and cycling. trains on the Victoria and sub-surface lines (Circle, District, Hammersmith & City and Across London, the Workplace Travel Metropolitan) will save an estimated 17,000 Plan programme continued to engage key tonnes of CO2 every year with a financial businesses to reduce car use and encourage saving of approximately £2m. active modes for commuter and business travel. Results show that at 93 sites with Additionally, energy efficient lighting including approved plans, an average 9.2 per cent fall in LED technology has been installed at several single-occupancy vehicle use was achieved. stations across the Underground network and the new Northern line service control centre The programme also supports businesses by boasts London’s largest living roof, the first on encouraging healthier, more active travel, as a railway building. well as TfL’s cycling objectives through the delivery of employee cycle benefits. More Low-carbon stations than 90 per cent of London schools are now Work continued at stations across the signed up to a travel plan, and car use has network to save energy and reduce dropped by an average of 6.2 per cent since introducing School Travel Plans in 2004. emissions. At South Croydon station, electricity use has been cut thanks to Reducing carbon emissions on 42 photovoltaic solar panels that are the Tube now powering new CCTV cameras In January, London Underground and lighting. became one of the first public transport The technology is totally National Grid- operators to achieve the Carbon Trust free, resulting in 136 per cent of carbon Standard, in recognition of its work and emissions being off-set. Other improvements ongoing commitment to improve at the station include a 400 metre path carbon efficiency. for pedestrians and cyclists, new parking for bicycles and motorcycles, plus larger The standard was awarded based on actions parking bays for disabled drivers. The station and achievements between 2006 and 2009, forecourt has also been refurbished. as well as plans to cut carbon emissions in TfL worked with Southern Railway, London the future. The amount of CO2 released per Rail, Croydon Borough Council, passenger kilometre reduced from 81g in and Seltrans on the £435,000 project. 2006/07 to 75g in 2008/09.

64 Transport for London – Annual Report and Statement of Accounts 2009/10 Reducing transport’s contribution to climate change and improving its resilience 65 66 Transport for London – Annual Report 2009/10 Supporting delivery of the 2012 Games and securing a lasting legacy

More than 800,000 spectators could attend the Games every day. TfL aims to ensure that each one can walk, cycle, travel by public transport or use park-and-ride services.

The sustainable Games Also benefiting local residents before and after the Games is the expanded three-car The London 2012 Olympic and service on the Docklands Light Railway’s Paralympic Games will be the most busiest route (Bank to Lewisham), which sustainable ever. began in January. It will be fully rolled out across the network during 2010, and is being TfL is working with London 2012 and other part-funded by the ODA. partners to ensure best use is made of existing infrastructure and that the transport Work continues on the 6km Docklands Light network is being maximised for spectators Railway extension to Stratford International. and the Games’ workforce. It follows the Jubilee line route and is made up of former stations at Extending the Docklands Canning Town, West Ham and Stratford. The Light Railway extension also has four new stations: Star Lane, Abbey Road, Stratford High Street and The Docklands Light Railway will play Stratford International. a crucial role during the 2012 Games, providing fully accessible transport for When it opens in autumn 2010, it will provide a major boost to the area. Benefits the Olympic Park and other key venues. will include improved transport capacity and During April, an £18.2m funding package a reliable, frequent service from Stratford from the ODA was confirmed that will enable International to Woolwich and Beckton, well infrastructure improvements to continue in advance of the 2012 Games. on the Beckton route. This branch serves the Olympic venue ExCeL, and currently operates a two-car service. The finance will enable a third carriage to be introduced to keep pace with growing passenger numbers and demand for the 2012 Games. The route is expected to transport around 70,000 passengers a day during the event.

Supporting delivery of the 2012 Games and securing a lasting legacy 67 Olympic Route Network TfL has been working with the ODA to develop a network of roads – called the Olympic Route Network (ORN) – which £11.5m will ensure members of the Olympic in funding was announced for Family (Games officials and athletes) urban realm improvements can travel to key venues and in six London boroughs destinations quickly and easily. The programme to develop the ORN has made significant progress this year. Following be completed during 2011 so people can full public consultation on the proposed benefit well ahead of the Games. network by the DfT, a Designation Order was made in July that defines roads forming Olympic river service the ORN and gives the ODA a number of , the ODA and powers. These include putting in place traffic boat operators have been working regulations, designating additional roads (subject to consultation), and approving together to develop plans to run services planned roadworks on the ORN. from central London based on existing patterns of operation. Preliminary designs for the ORN are now almost complete and an upgrade of traffic The main focus is on destination piers that signals and permanent road improvements are are within easy walking distance of the already providing early benefits for Londoners. Olympic venues at Maritime Greenwich In addition, TfL is working with boroughs, and Greenwich Peninsula. The , highway authorities and utility companies to Westminster and London Bridge are key develop a strategy to minimise disruption piers for passengers joining river services caused by street and roadworks during for Olympic venues. Standard 15-minute the Games. frequencies will run with extra capacity to respond to spectator demand. Olympic walking and cycling Urban realm improvements During 2009/10, progress was made on In March, the Mayor announced £11.5m developing a network of routes designed funding for projects in six London to enable and encourage Games’ boroughs to help transform the spectators to travel on foot or by bike. look and feel of the Capital in time for The Olympic Walking and Cycle Route the 2012 Games. programme was granted £9.81m to complete eight routes. Their creation involves 121 In Westminster, £7m will restore Piccadilly, different schemes and by March, 12 had St James’s and Pall Mall to their former been completed and preliminary work had status as great London boulevards with begun on all but 15. The network will two-way traffic. Another £1.5m will fund

68 Transport for London – Annual Report and Statement of Accounts 2009/10 a revamp for Jubilee Gardens in Lambeth weighing up to 350 tonnes, the equivalent and £1.3m will be used to improve Kingsland of taking 17 lorries off the roads, helping High Street in Hackney. Projects in Camden, to smooth traffic flow. After the Games, Enfield and Merton also had funding approved. facilities such as this will remain for the long- term benefit of London’s freight industry. All the projects were chosen as they support the Mayor’s Great Outdoors programme, Upgrading key stations which aims to improve public spaces, and will be of direct benefit to the 2012 Games. As well as the ongoing programme of line Walking and cycle routes to Olympic sites upgrades on the Tube (particularly on the will be upgraded, pedestrian crossings and Jubilee line, which will serve a number of access to stations will be improved and key Games venues and have a third more footways will be decluttered. capacity once work is completed this The waterways year), several key stations are being upgraded in advance of the Games. In June, a new canal lock, the Prescott Channel, opened in Bromley-by-Bow. Stratford Regional station is being completely TfL contributed £4m to the structure, transformed, with new platforms, subways, which was built specifically with the walkways, lifts and ticket halls. Work is well advanced at and construction work for the 2012 Games stations to deliver full step-free access in in mind. 2011 and 2010 respectively. Freight operators are able to bypass London’s roads and use the network of waterways instead. The lock can accommodate barges

Supporting delivery of the 2012 Games and securing a lasting legacy 69 70 Transport for London – Annual Report and Statement of Accounts 2009/10 Improving efficiency, equality and partnerships

As well as transforming London’s transport networks, TfL is ensuring its business operations run efficiently and effectively and deliver maximum value for fare and taxpayers.

Delivering for London The team’s skills and experience will enable it to fully advise on, and examine, all aspects In March, the TfL Board approved of the programme, including the ex-Metronet a £9.2bn budget for 2010/11 which works. However, the group will have no remit will deliver radical improvements to over Crossrail which is subject to separate passenger services. governance and assurance arrangements.2 Part of TfL’s Investment Programme, the Fares budget includes operating cost and capital The Mayor’s 2010 fares package was investment and will fund projects due for completion in later years. It is underpinned designed to ensure the continued by a drive to provide better value for fare and delivery of frontline services and taxpayers through at least £5.2bn in efficiency safeguard vital improvements needed to savings to be delivered over the term of TfL’s sustain the Capital’s transport network. Business Plan, which runs to 2018. Free and concessionary fares for London’s In the same month, the Mayor confirmed the older and young people, and those on low appointment of six world-class experts to a incomes, have been protected. Forty per cent new independent advisory group tasked with of bus passengers can therefore continue overseeing TfL’s Investment Programme. The to travel free or at a concessionary rate. members have a wide range of experience Additionally, the remains valid in disciplines including engineering, finance for travel 24 hours a day on all TfL services. and project management, plus technical and commercial expertise. They will provide Bus fares rose by 12.7 per cent and Tube impartial advice, scrutinise the delivery of fares by 3.9 per cent. However, this is the programme and will look at maintenance, comparable to 2005 and 2006 increases, renewal, upgrades and major projects. when bus and Tube fares went up by 12.7 per cent and four per cent, and 12.9 per cent

2 The reporting period for the 2009/10 Annual Report ended on 31 March 2010. Following this, TfL announced that it had reached agreement with Bechtel and Amey (Ferrovial) to buy their shares in Tube Lines, which will result in it becoming a wholly owned subsidiary of TfL when the deal is finalised. The independent advisory group’s remit will be expanded to cover all Tube activities.

Improving efficiency, equality and partnerships 71 and 3.9 per cent respectively. For the majority boroughs to share each others cameras, and of journeys, Oyster continues to provide have resulted in an increase in the number the best value single journey and daily prices of cameras available to both of around across the TfL network. 200, for a minimal cost. A major benefit of the scheme is the reduction of on-street Working with the boroughs furniture and lower costs for new cameras. In April, the Mayor and the boroughs Commitment to diversity published the London City Charter, which commits them to working together Black, Asian and minority ethnic to ensure public services continue to employees make up 32 per cent of TfL’s improve and are delivered as efficiently workforce and 25 per cent of employees as possible. are women. The work with London Councils and boroughs TfL endeavours to attract people who are to reform the Local Implementation Plan under-represented in the organisation to process has made it easier for boroughs to apply for available jobs. It also requires produce their transport plans. subcontractors to demonstrate how they address equality and inclusion issues through During 2010/11, London’s boroughs will delivery of TfL projects. receive £155m to deliver local transport improvements and initiatives. TfL is committed to equality and inclusion These include enhancing town centres and in all its operations. In January, London public spaces, making roads safer, increasing Underground gave its support to a new cycling facilities, improving sustainable campaign by leading disfigurement charity transport options, supporting electric vehicles Changing Faces. A total of 430 poster and car clubs, and smoothing traffic flow. advertising spaces on the Tube were donated to the campaign during one week in January. Eight boroughs along the route of the The posters featured thought-provoking two pilot Cycle Superhighways have been photographs of children with different types allocated an additional £1.49m. The money of facial disfigurement and challenged people will provide cycle training, parking and not to judge on appearance. The campaign maintenance to address the anticipated set out to break down stereotypes and increase in demand from residents living near assumptions that the public may have of the new infrastructure. young people with a physical difference. A simpler, more flexible system now allows During 2009/10, Surface Transport worked boroughs to move funding between projects with disability organisations to develop a if, during the course of the year, they find work placement project which employed two more or less investment is needed for disabled people. These projects will be further individual schemes. developed in 2010/11. In addition, a class During 2009/10, a CCTV camera sharing session on equality and inclusion issues was project delivered seven additional CCTV created and piloted by TfL’s senior managers. partnership schemes between TfL and the It is now ready to be rolled out across the London boroughs. These allow TfL and the organisation next year.

72 Transport for London – Annual Report and Statement of Accounts 2009/10 Efficient buildings Also this year, TfL has developed an approach that ensures its supply chain Over the next 25 years, TfL plans to develops its workforce while offering save up to £100m through its new office employment and training opportunities to accommodation strategy. local communities. The contract for the London Cycle Hire Scheme was the first to As part of this it is consolidating its back- be awarded with these conditions attached, office operations at three principle locations and it will mean the creation of almost 180 – Palestra in Southwark, Greenwich Peninsula new jobs including 29 new apprentices. and at London Bridge. This strategy TfL contracts worth almost £3.5bn now will significantly reduce operating costs and include these conditions, and will provide provide a greener working environment. around 3,500 apprenticeship and training In November, three key transport control opportunities through the supply chain operations were relocated to one building over the next four to five years. The model saving rental costs. developed within TfL is now being rolled out across the broader GLA family. Responsible procurement TfL is working to embed responsible procurement throughout its operations. In May, Victoria Coach Station became the first organisation in the transport During 2009/10, it was independently evaluated sector to achieve the Government’s at Level 5 – the highest level – of the flexible Customer Service Excellence standard. framework for sustainable procurement. Developed by the UK Government Sustainable It was assessed against a wide range of criteria Procurement Taskforce, the framework enables including customer satisfaction, complaint organisations to benchmark themselves against resolution and the professionalism of best practice implementation of sustainable staff. The coach station received particular procurement. The achievement reinforces TfL’s commendation for its complaint handling, successful implementation of the GLA Group which the assessor said indicated ‘a dedication Responsible Procurement Policy. to getting things right for the customer’. The standard replaces the former charter mark scheme, which the coach station had held since 1994. It is awarded for three years and annual follow-up checks will £100m ensure standards are being maintained and savings will be made by improvements put in place where possible. TfL through its new office accommodation strategy

Improving efficiency, equality and partnerships 73 Newspaper contract In March, TfL announced that, subject The Museum had a productive and to contract, London Underground and busy year and welcomed more than London Bus Services Ltd would award 282,000 visitors. Associated Newspapers Ltd with the Two exhibitions were held during 2009/10: concession to distribute a free morning Street Smart offered families a hands- title at around 250 Tube stations and 14 on way to learn about road safety, and London bus stations. Suburbia, supported by , explored how public transport helped create This allows the contract holder, owner of the the Capital’s suburbs and how they have Metro, to distribute free papers on weekday featured in its cultural landscape. mornings. The concession lasts for seven- and-a-half years and Metro’s owner has held As a subsidiary company of TfL, and an the current contract, which expired on April 2 educational and heritage charity, London 2010, since 1999. The title has become part Transport Museum works closely with TfL of daily life in the Capital. while enjoying the financial benefits of charitable status. More than 50 organisations Revenue from the deal will go towards contribute to the Museum’s work annually, improving London’s public transport system, through a thriving Corporate Members’ including the upgrade of the Tube. It will also Scheme. This year the scheme has benefited fund carbon-cutting projects and aims to from 10 per cent growth due to the launch further encourage newspaper recycling with of ‘Thought Leadership’ events, supported more bins at key stations. In addition, the by Eversheds. The programme offers an deal will feature measures to cut the number opportunity for members, the Government of copies left behind at the end of every day. and leading academics to discuss cross- sector industry issues. These include climate change, funding, technology and the promotion of engineering as a career choice. The Museum attained accreditation 282,000 under Visit ’s Visitor Attraction people visited London Quality Assurance Scheme for the second Transport Museum during consecutive year. It is also accredited by the Council for Museums, Libraries and Archives the year (MLA) under the national standards scheme and its collections are designated as being of national importance. Through the MLA, the Museum is funded by the Renaissance programme to deliver projects that support education and community development.

74 Transport for London – Annual Report and Statement of Accounts 2009/10 During the year, innovative programmes activities to help build the employability continued to reach new and wider audiences skills of young people not in education. both on-site and through outreach initiatives, with school group visits reaching capacity. Additionally, the Museum worked with BTP this year to deliver training for their new volunteer A partnership with TfL and the London Transport Youth Engagement Officers. Apprenticeship Company supported a number of young people considering careers in the transport industry. The scheme, called ‘Route into Work’, delivered practical

Improving efficiency, equality and partnerships 75 Progress against the Mayor’s Transport Strategy

Over the next two decades, London’s The new MTS identifies six goals: population is expected to grow by >> Support economic development around 1.25 million and its workforce and population growth by 750,000. >> Enhance the quality of life for It is TfL’s responsibility to ensure the all Londoners Capital’s public transport network is fit to cope with these increases. >> Improve safety and security of all Londoners Paving the way, the new Mayor’s Transport Strategy (MTS), published in May 2010, >> Improve transport opportunities covers the next 20 years to 2031. for all Londoners Its goals and outcomes have been shaped >> Reduce transport’s contribution with help from the people of London, to climate change and improve through a three-month public consultation its resilience that began in October 2009. And it reflects >> Support delivery of the London 2012 ideas outlined both in the Mayor’s ‘Way to Olympic and Paralympic Games and Go!’ document published in November 2008 its legacy and his Statement of Intent (May 2009), published for consultation with the London These goals will guide TfL as it develops a Assembly and the GLA Group. transport system geared for the next decade Alongside a new London Plan and Economic and beyond. That work is already under way Development Strategy, the revised MTS builds in many respects – Crossrail, Tube upgrades, on what has already been achieved during London Overground’s expansion, walking and the 10 years since the original strategy was cycling initiatives, plus schemes to smooth established, and sets out a vision for London’s traffic flow and make transport safer and long-term growth and development. more accessible to everyone.

In this Annual Report, TfL is obliged to report on achievements delivered in support of the 2001 MTS – the legal strategy in place during the reporting period, April 2009 to March 2010. The following pages highlight key elements of the progress made during that time.

76 Transport for London – Annual Report and Statement of Accounts 2009/10 Priority A Priority B Reducing traffic congestion: Overcoming the backlog of investment >> TfL and 18 London boroughs introduced on the Underground so as to safely a permit scheme, aimed at reducing increase capacity, reduce overcrowding disruption from roadworks. It requires and increase reliability and frequency companies to apply for permission of services: before digging up the Capital’s busiest main roads. It also gives permit >> The biggest investment in the Tube for authorities greater ability to control the decades, which will increase capacity by timing and management of works being almost a third, gathered pace. In July, carried out on their roads plus more the re-signalling programme for the opportunities to coordinate works, Circle, District, Hammersmith & City and thereby minimising disruption Metropolitan lines was put out to tender. In December, the Circle line was extended >> TfL and six utility companies operating to Hammersmith as part of a new service in London have signed up to the Mayor’s pattern. Progress was also made on the Code of Conduct for Roadworks. The Jubilee line, although the contractor has code seeks to encourage best practice been unable to complete on time and innovative working methods by works promoters and improve collaboration >> The first of the Victoria line’s new trains between them to reduce unnecessary entered service in July along with a new disruption from roadworks signalling system. And the first of 191 new air-conditioned trains for the >> A high-tech, 24-hour control hub opened Circle, District, Metropolitan and in September, combining three centres Hammersmith & City lines arrived for overseeing London’s bus, street and testing in October, and is due to enter Metropolitan Police traffic operations. It service in summer 2010 handles about 1,000 unplanned incidents a month as well as 750 scheduled major >> Timetable improvements on the annual events have made journeys faster and cut waiting times by a quarter >> Twenty special image-recognition cameras were installed at traffic hot >> Station improvements continued. A new spots, enabling control centre operators ticket hall opened at King’s Cross St. to respond rapidly when situations occur Pancras, and plans to upgrade Victoria Tube station were approved. A tender was issued for the £300m redevelopment of Bond Street station and work continued on Blackfriars Tube station

Progress against the Mayor’s Transport Strategy 777777 Priority C Priority D Making radical improvements to bus Better integration of the National Rail services across London, including system with London’s other transport increasing the bus system’s capacity, systems to facilitate commuting, reduce improving reliability and increasing overcrowding, increase safety and move frequency of services: towards a London-wide, high frequency >> All 8,500 London buses now have iBus ‘turn up and go’ metro service: state-of-the-art on board information >> The Oyster ticketing system was technology which tells passengers their extended to cover all commuter rail location, next stop and final destination routes within Greater London. More than seven million Oyster cards are now >> Excess waiting time on high-frequency regularly used, accounting for more than bus services was maintained at 1.1 three billion journeys last year minutes, matching the best-ever recorded levels. This is the principal >> West Londoners gained direct access measure of bus service reliability to the London Overground and rail networks with the opening of the £7.8m >> Contracts were awarded to develop Imperial Wharf station, which links the Countdown signs, providing bus arrival major Clapham Junction and Willesden information at 2,500 bus stops, and TfL’s Junction interchanges website now provides more service details >> The roll-out of 54 new air-conditioned, >> Work has begun on a new and innovative three-carriage Overground trains began London bus which will be 40 per cent more in July. With flip-down seats to provide fuel efficient than conventional buses. It is extra standing room for hop-on, hop- expected to enter service in 2011 off journeys, they can carry almost 500 >> A high-frequency bus service, called passengers each – eight per cent more East London Transit, began operating than the old stock between Ilford, Barking and . It is expected to carry about six million passengers a year

78 Transport for London – Annual Report and Statement of Accounts 2009/10 Priority E Priority F Increasing the overall capacity of Improving journey time reliability for London’s transport system by promoting car users, which will particularly benefit major new cross-London rail links Outer London where car use dominates, including improving access to while reducing car dependency by international transport facilities; increasing travel choice: improved orbital rail links in Inner >> TfL reviewed 1,003 traffic signal timings London; and new Thames river crossings across the Capital to ensure their safe in east London: and efficient operation and to reduce >> Work began on the first Crossrail station, stop-start delays, including at major Canary Wharf. One of the biggest on intersections like Trafalgar Square, Hyde the Crossrail network, it will enable the Park Corner and Hanger Lane Gyratory growth of the Docklands area, supporting >> Infrastructure that enables traffic signal economic growth and regeneration timings to adapt automatically in real- >> Tottenham Court Road station’s time to best suit current traffic conditions redevelopment continued in preparation has been added to an additional 335 sites for Crossrail to help reduce delays and congestion >> TfL published a review of options for new >> Consultation on proposed changes to the east London river crossings, following Tottenham Hale Gyratory showed strong cancellation of the Thames Gateway public support for plans, which include Bridge project converting to two-way traffic, improving facilities for pedestrians and cyclists, and >> London Overground took control of 10 creating a public square at Tottenham stations between Surrey Quays and West Hale station Croydon as it prepared for the re-opening of the East London line in spring 2010

Progress against the Mayor’s Transport Strategy 79 Priority G Priority H Supporting local transport initiatives Making the distribution of goods to include: improved access to town and services in London more centres and regeneration areas; walking reliable, sustainable and efficient, and cycling schemes; safer routes to while minimising negative school; road safety improvements; environmental impacts: better maintenance of roads and >> Proposals were announced to include bridges; and improved coordination the oldest and most polluting heavier of streetworks: vans and minibuses in the LEZ. Restrictions were also proposed on >> TfL’s collaboration with the London the most polluting taxis and private Borough of Sutton on the Smarter Travel hire vehicles Sutton scheme, which encourages residents to walk, cycle or use public >> The Freight Operator Recognition Scheme, transport, has seen a six per cent cut in which helps measure operators’ efficiency, car journeys over three years. Cycling has was reinforced with the London Freight increased by 75 per cent Plan, providing guidance on reducing fuel use, emissions and CO2 levels >> Twelve Outer London boroughs were selected as ‘Biking Boroughs’ and awarded funds to look at ways of developing cycling in their areas >> A £6m facelift of Woolwich town centre was completed, improving safety for pedestrians, cyclists and road users. Among other local regeneration projects, several pedestrian improvement schemes were carried out in the West End

80 Transport for London – Annual Report and Statement of Accounts 2009/10 Priority I Priority J Improving the accessibility of London’s Bringing forward new integration transport system so that everyone, initiatives to: provide integrated, simple regardless of disability, can enjoy the and affordable public transport areas; benefits of living in, working in and improve key interchanges; enhance visiting the Capital, thus improving safety and security across all means social inclusion: of travel; ensure that taxis and private >> A total of 59 Underground stations are hire vehicles are improved and fully now step-free and work is progressing to incorporated into London’s transport increase this number system; and provide much better information and waiting environments: >> A Travel Support Card, making it easier >> Oyster pay as you go was extended to for people with hidden disabilities such allow seamless travel across Tube, bus, as autism to ask for help from staff, rail and river services was introduced >> Twenty new Travel Safe Officers began >> All touch-screen ticket machines at Tube patrolling London Overground services stations have now been upgraded to to deter antisocial behaviour, as part of operate in 17 languages, making travel a 12-month trial easier for London’s diverse communities as well as visitors >> TfL announced plans to tighten guidelines for licensing taxi and private hire drivers >> Building on improvements made in recent in London and the Safer Travel at Night years, TfL revised its Disability and Deaf campaign continued to build awareness Equality Scheme, which sets out plans of the dangers of illegal cabs for improving travel for disabled and deaf people in London >> Wider availability of Visitor Oyster cards is expected to make travel on London’s public transport network easier and more attractive. During the year, easyJet and First began selling the cards, which have pre-loaded credit limits. Other partners already include Eurostar, National Express coach services, Gatwick Express and Stansted Express

Progress against the Mayor’s Transport Strategy 81 Statement of Accounts

82 Transport for London – Annual Report and Statement of Accounts 2009/10 Explanatory Foreword and Financial Review 84 Statement of Responsibilities for the Accounts 94 Annual Governance Statement 95 Independent Audit Report to Transport for London 102 Group Income and Expenditure Account 106 Corporation Income and Expenditure Account 107 Statement of Movement on the General Fund Balance 108 Reconciliation of the Deficit on the Corporation’s Single Entity Income and Expenditure Account to the Deficit/(Surplus) on the Group Accounts 109 Statements of Total Recognised Gains and Losses 110 Group and Corporation Balance Sheets 111 Cash Flow Statements 112 Statement of Accounting Policies 116 Notes to the Accounts 122

Statement of Accounts 83 Explanatory Foreword and Financial Review

2009/10 was a year of challenges for TfL. Major projects were progressed to improve and extend service. These included the integration of Metronet; Tube upgrades; extensions on London Overground and the Docklands Light Railway; and preliminary works on the Crossrail project.

This drove a significant increase in capital The fall in passenger numbers was offset by expenditure. With an uncertain economic an above inflation fares package designed background, passenger demand declined. To to enable TfL to maintain its Investment offset the risk to TfL’s revenue, the Mayor Programme. This resulted in a 4.1 per cent increased fares above inflation, and TfL increase in revenue to £3,594m. Operational significantly increased its savings programme spend excluding exceptional items decreased resulting in a £5 billion efficiencies over the by 0.7 per cent to £5,274m. life of the business plan. The level of capital works being undertaken Highlights during 2009/10 remained high, and included a much increased contribution from the Towards the end of 2009/10, passenger Crossrail project. Capital expenditure during demand across the TfL network started the year was up 11.2 per cent to £3,139m. to show signs of recovery from the decline in passenger numbers seen early Revenue in 2009/10. TfL’s main source of revenue remains fares on the London Underground Year on year, passenger journeys on the and bus network, including revenue Underground fell by 2.2 per cent to 1.07 billion, the first fall in numbers since in respect of free travel for older and 2005/06. Service demand on the bus network disabled people. This represents rose very slightly to 2.26 billion passenger 80.9 per cent of all revenue generated journeys for the year, and the Docklands in 2009/10. Light Railway carried 69 million passengers in the year. The lower levels of passenger demand across the network, offset by fare increases, resulted in a 1.3 per cent increase in fares revenue on the Underground to £1,635m, and a 6.1 per cent increase in fares revenue on the bus network to £1,145m.

84 Transport for London – Annual Report and Statement of Accounts 2009/10 Revenue breakdown (2009/10) prices were held steady in January 2010, but other fares, particularly Oyster pay 4% 4% as you go, increased. These changes together 6% increased the average Underground fare by 3.9 per cent and the average bus fare by 12.7 9% per cent. Over the course of 2009/10 the use of 45% Oyster pay as you go fares as a percentage of all Underground journeys increased from 35 per cent to 37 per cent. During the 32% same period the use of cash fares on the Underground declined from 2.8 per cent to 2.6 per cent. On buses, pay as you go use increased from 18 per cent to 20 per cent over the year, while cash fares as a Fares revenue (London Underground) percentage of all journeys remained static at Fares revenue (bus network) around 1.6 per cent. Congestion Charging scheme In January 2010 the use of pay as you go was Other income extended to include all National Rail services Rent and commercial advertising in Greater London. The revenue share earned Fares revenue (Rail) by National Rail rose quickly from £1.8m in the first week after launch to almost £3.0m Total revenue by mode (£m) in the last week of the financial year. Pay as you go revenue across all operators rose 1769 1795 by over 5 per cent over the financial year. In 1528 1560 addition to the extension to National Rail, pay as you go was also launched on Thames Clipper services in November 2009. Total fares revenue on the Docklands Light Railway for 2009/10 was £76m compared with £64m for 2008/09.

142 120 97 35 Surface LU Transport Rail Other

2008/09 2009/10

Statement of Accounts 85 Operational expenditure Expenditure breakdown (2009/10) Operating expenditure on the 3% Underground increased by 3.5 per cent to £2,301m. 14%

This increase arose from the combined effects of pay awards and inflationary 53% pressures, mainly in property costs and utility charges. Bus network costs increased overall by approximately £29m to £1,837m. There was an increase of £52m due to 30% contract price adjustments applied to all bus contracts. These price adjustments are based on a weighted uplift using Retail Price Index (RPI), earnings index and diesel prices. This Running costs was offset by other operating cost savings and a reduction in funding for the East Staff costs Thames Buses operations which were sold in PPP maintenance, leasing and PFI charges September 2009. Financial assistance There was a decrease in expenditure on Congestion Charging mainly due to a reduction in staff costs and lower contract costs from the new operator. Expenditure by mode (£m) Expenditure on Rail increased as a result of the inclusion of London Tramlink for the 2586 2607 2301 full year and increased costs at Docklands 2223 Light Railway reflecting the full year costs of operating the Woolwich Arsenal extension. TfL continued to support borough schemes that improve the quality, safety, accessibility and sustainability of the local travelling environment. The overall funding package for 2009/10 included £153m provided directly 236 243 268 to the boroughs through the LIP programme, 123 and additional expenditure of £12m renewing Surface LU Rail Other traffic signals on borough roads. Other Transport financial assistance included payments related to Taxicard. 2008/09 2009/10

86 Transport for London – Annual Report and Statement of Accounts 2009/10 Interest and finance charges Capital expenditure by mode (£m) Interest payable increased by £69m 1607 1495 due to increased borrowings and higher 1360 average finance lease creditors.

Interest receivable decreased by £91m 905 reflecting significantly lower interest rates and lower average cash balances.

224 201 Balance sheet 905 86 83 Surface Rail/ Net assets decreased by £2,174m LU Other Transport Crossrail between 31 March 2009 and 31 March 2010, largely due to an increase in 2008/09 the pension deficit of £1,002m and 2009/10 the use of grant to fund the Investment Programme. On the Underground, good progress has continued on the upgrades of the Victoria

and sub-surface (Metropolitan, District and Fixed assets increased significantly, Circle & Hammersmith) lines. The first new reflecting the continuing high levels of Victoria line train entered passenger service capital expenditure particularly in respect of in July, initially at off-peak times, and by the the Crossrail project. As explained further end of the year five of the new trains were below, £319m of fixed assets were provided operating throughout the traffic day. New under the PPP contract with Tube Lines. signalling and control systems have been This resulted in an increase in finance lease installed and continue to prove themselves creditors over one year, although this was alongside the existing signalling, which will offset by the termination of the Prestige remain in place until all the old trains have PFI contract. been phased out. Capital expenditure The first of the new air-conditioned, walkthrough ‘S-stock’ trains for the sub- Capital expenditure rose to £3,139m. surface lines was delivered to London Nearly 48 per cent of TfL’s capital in October and is being tested prior to expenditure during 2009/10 related to introduction at the north end of the capital works being undertaken on Metropolitan line later this year. LU’s infrastructure.

Statement of Accounts 87 As well as progress with the major line Capital expenditure of £1,360m was incurred upgrades, the process of ongoing renewal by Rail, of which £569m relates to London of the Underground’s core assets continued Rail and £791m to the Crossrail project. The with the replacement during the year of London Rail expenditure includes DLR projects 27 kilometres of track, refurbishment or such as the Stratford International extension, replacement of 26 escalators and lifts, and capacity enhancement works to upgrade the the completion of 23 station refurbishments railway to enable three car operation, and and modernisations. the acquisition of new rolling stock. Other projects included completing the extension to In November 2009 the new Northern ticket the East London Line, which opened in May hall opened at King’s Cross St. Pancras 2010, and London Overground improvements station, doubling capacity, cutting congestion for the North London Line. For the Crossrail and improving accessibility with step-free project, £319m was spent on preparatory access provided to five of the six lines that works and £472m on the acquisition of serve the station. Step-free access to the properties required for the project. Northern line will be available later this year. Preparatory work is well underway for Financing the upgrade of Victoria station following Government approval of the project in July TfL raised further funds during the year 2009. Major redevelopment is also in progress from a variety of sources to support its at Tottenham Court Road in order to upgrade Investment Programme. the Underground station and to provide an interchange with Crossrail. Set out below is a table summarising movements in long-term borrowing in the In Surface Transport, £201m was spent year. In addition to the sources of financing on capital works, including: the Cycle Hire in the table below, other sources of financing Scheme; other cycling and walking initiatives; include the PPP and PFIs (see also Notes 19 completion of the iBus radio and information and 21 to the accounts). system; renewal works programme on the Transport for London Road Network (TLRN); safety improvements to bridges and tunnels; and traffic signal modernisation.

88 Transport for London – Annual Report and Statement of Accounts 2009/10 £m Notes Opening borrowing at 1 April 2009 3,018 European Investment Bank loans The fifth and final instalment of a total facility of £450m to be drawn down over five years. The loan has an interest rate of 4.293 per cent fixed for the full loan amount. Repayment is in 15 equal instalments from • East London line 66 March 2017 The loan has an interest rate of 4.856 per cent fixed for the full loan amount. Repayment is in 12 equal • Docklands Light Railway 200 instalments from March 2021 The first instalment of a total facility of £1bn drawn over six years. The loan has an average fixed interest rate of 4.9 per cent. Repayment of the loan is between • Crossrail 150 2021 and 2058 Forty separate loans with a weighted average interest rate of 4.19 per cent and final maturity ranging between Public Works Loan Board 684 2018 and 2059 Closing borrowing at 31 March 2010 4,118 The borrowing limit for the Corporation set Over the past year, the fair value of the by the Mayor for 2009/10 was £4.197bn. assets of these Sections has increased by over £1,150m. This is more than offset by an increase in the actuarial value of future Cash and short-term investments liabilities of £2,116m, and as a consequence Total cash and short-term investments (364 the deficit of pension scheme assets over days or less) held by the Corporation at 31 future liabilities for the TfL Pension Fund has March 2010 amounted to £1,509m. The increased by £966m. average yield from TfL’s cash investments for 2009/10 was 0.66 per cent. The yield is In addition, at 31 March 2010 the Group had significantly reduced this year as a result of future liabilities under unfunded pension generally lower interest rates and a change arrangements of £52m, an increase of £11m in investment strategy. Most of the cash from 2009. is represented by reserves and borrowing The latest full actuarial valuation of the earmarked to fund TfL’s future Investment TfL Pension Fund was carried out as at 31 Programme including the Crossrail project. March 2009. The 2009 valuation showed a deficit on the three Sections for funding Pensions purposes of £1,331m, and as a result of this the employers agreed a revised Schedule of As at 31 March 2010, the majority of Contributions with the Pension Fund. TfL’s employees are members of the Public Sector Section of the TfL Pension Fund, following the transfer of the two former Metronet Sections into the Public Sector Section on 30 March 2010.

Statement of Accounts 89 Prospects and outlook Passengers In October 2009, TfL published its The investment in the Business Plan is updated Business Plan for the years designed to support London’s projected to 2017/18. growth - population growth of up to 1.25 million and employment growth of up to This adjusted the previous year’s plan for 0.75 million by 2031. the significant impacts of the recession and integration of Metronet, whilst maintaining This means there will be around three million delivery of key projects to meet the transport extra trips a day in the Capital by 2031. needs of the London 2012 Olympic and Paralympic Games. The Tube upgrades will provide more than a 30 per cent increase in capacity by 2022, The Crossrail project, a £16bn investment in catering for anticipated demand growth and a new rail route across London, has started addressing current overcrowding. construction of enabling works. Crossrail will deliver a 10 per cent increase in rail- based network capacity in London, and is Fares policy expected to contribute around £40bn to the The Business Plan assumes that fares will wider UK economy. rise at two per cent above the RPI in each Financing of the Business Plan is from: year of the Plan period. Fares decisions are taken annually by the Mayor. >> Fares income To help offset financial pressures caused by >> Congestion Charge income factors including the collapse of Metronet >> Government grant and TfL borrowing and a recession-linked fall in Tube ridership, the fares package for 2010 was set so that, >> Secondary income such as advertising overall, bus fares will rise by 12.7 per cent >> Third party funding for specific projects and Tube fares by 3.9 per cent. >> Sales of property and other assets

90 Transport for London – Annual Report and Statement of Accounts 2009/10 Revenue pressures Treasury risk management The economic climate has deteriorated The Board approves prudent treasury significantly since the 2008 Business Plan policies that comply both with the was produced. principles of the CIPFA Prudential Code and investment guidance issued by the TfL’s Business Plan published in 2009, Secretary of State under Section 15 (1) (a) reflected the deterioration in economic of the Local Government Act 2003. conditions that had occurred since the previous Plan and the estimated impact on Senior management directly controls day- fares income, and made various adjustments to-day treasury operations. The Finance and to compensate. The economic situation Policy Committee (a sub-committee of the continues to be monitored closely. If TfL Board) is the primary forum for discussing income is lower than anticipated, further the annual treasury investment strategy and adjustments to expenditure will be made, to policy matters and for submitting proposals ensure that financial balance is maintained. to the Board. Cost pressures Treasury operates on a centralised, non- speculative risk basis. Its purpose is to TfL’s operations and ongoing Investment identify and mitigate residual treasury- Programme are subject to a range of related financial risks inherent to the Group’s potential cost pressures. business operations. TfL has considered the implications of its These include: overall asset and liability management, with Economy analysis continuing on its overall exposure Unexpected inflation on operating and to inflation and interest rates as they affect capital costs, together with impacts on its commercial markets (passenger levels, passenger demand levels. fare revenues and costs) and in its financial activities (financial costs and investment Asset renewal returns on cash balances). Unforeseen costs of bringing transport The results of this analysis did not lead to assets such as roads and the Underground significant changes in the recommended into a state of good repair. treasury management strategy (medium/ Legislative compliance long-term fixed-rate debt and short-term Additional national and EU legal requirements. cash investments with institutions having high credit ratings), but have focused on Energy prices the opportunities to increase yield without Increase in oil and/or electricity prices. risking underlying security.

Terrorism Terrorism-related and increased security costs.

Statement of Accounts 91 The primary treasury-related financial risks Funding and liquidity faced by the Group are counterparty credit, To ensure continuity of affordable funding, liquidity and interest rate movements. debt maturities are spread over a range of These are the focus of treasury policies, as dates which broadly equate to the lives of set out below: assets purchased with the proceeds of debt. The maturity profile of debt outstanding at Counterparty credit 31 March 2010 is set out in Note 21 to the The Group’s exposure to credit- accounts. Due to the size and long-term related losses i.e. non-performance by nature of future commitments, significant counterparties on financial instruments, is cash balances are held to mitigate the risk of mitigated by setting a minimum required any future restriction of access to funds. credit rating and applying financial limits based on credit ratings. For 2009/10, TfL Interest rates followed a conservative investment strategy, TfL has approved parameters of a minimum investing only with UK Government (via the of 50 per cent fixed-rate on existing and Debt Management Office) and the four main forecast debt. The proportion of fixed-rate UK clearing banks. The amounts that can debt borrowings at the year end was 100 be invested with the DMO were not limited, per cent. Cash investments at the year end while amounts invested with the UK clearing reflected rates for maturities ranging from banks were based on the bank’s credit rating overnight to 45 days, with a weighted average and any Government support. The minimum maturity of 27 days. limit is A+ / A1 with a financial limit of £40m, and the maximum is AAA / Aaa with a limit of £200m. Credit ratings are obtained from the three main ratings agencies and are kept under constant review.

92 Transport for London – Annual Report and Statement of Accounts 2009/10 Accounting statements The Statement of Accounts comprises:

Transport for London is a statutory >> The Corporation income and expenditure corporation established by section account, statement of movement on 154 of the Greater London Authority general fund balance, statement of total Act 1999 (GLA Act 1999). It is a recognised gains and losses, balance functional body of the Greater London sheet, cash flow statement Authority (GLA) and reports to the Mayor >> The statement of accounting policies of London. >> Statement of responsibilities for the accounts The legal structure is complex in comparison to that of most local authorities and comprises: >> Notes to the Corporation financial statements >> The Corporation, which is made up of London Streets, the Public Carriage Office The Group Accounts comprise: and the corporate centre which, for legal and accounting purposes, constitutes TfL >> The Group income and expenditure >> The TfL Group, which is made up of the account, statement of total recognised Corporation and its subsidiaries as set gains and losses, balance sheet and cash out in Note 12 flow statement Under the GLA Act 1999, the Corporation is >> Reconciliation of the single entity treated as a Local Authority for accounting income and expenditure account surplus purposes and the Statement of Accounts, or deficit to the group income and which includes the individual financial expenditure account surplus or deficit statements of the Corporation, has been prepared in accordance with the Code of Within the Statement of Accounts Practice on Local Authority Accounting in references to the ‘Corporation’ relate to the United Kingdom 2009: A Statement of the transactions, assets and liabilities of Recommended Practice (SORP). TfL. References to the ‘Group’ relate to the accounts of TfL and its subsidiaries. TfL’s subsidiaries are subject to the accounting requirements of the Companies Act 2006 and separate statutory accounts are prepared for each subsidiary and for the Transport Trading Limited Group (TTL Group). The financial statements for the TfL Group, which consolidate the accounts of the Corporation and its subsidiaries on the basis set out in the statement of accounting policies (paragraph d), are also presented alongside the financial statements of the Corporation.

Statement of Accounts 93 Statement of Responsibilities for the Accounts

The Corporation is required to: In preparing this Statement of Accounts I certify that I have: >> Make arrangements for the proper administration of its financial affairs and >> Selected suitable accounting policies and to secure that one of its officers (its Chief then applied them consistently Finance Officer) has responsibility for the administration of those affairs >> Made judgements and estimates that were reasonable and prudent >> Manage its affairs to secure economic, efficient and effective use of resources >> Complied with the SORP and safeguard its assets >> Kept proper accounting records which were up to date The Chief Finance Officer is responsible for the preparation of the Statement of >> Taken reasonable steps for the Accounts for the Corporation and the Group prevention and detection of fraud and which, in the terms of the SORP, is required other irregularities to give a true and fair view of the financial position of the Corporation and Group at the accounting date and the income and expenditure for the year ended 31 March.

Stephen Critchley Chief Finance Officer 23 June 2010

94 Transport for London – Annual Report and Statement of Accounts 2009/10 Annual Governance Statement

Scope of responsibility The purpose of the Transport for London (TfL) is responsible governance framework for ensuring that its business is conducted The governance framework comprises the in accordance with the law and proper systems and processes, and culture and standards, and that public money is values, by which TfL is directed and controlled safeguarded and properly accounted for, and and the activities through which it accounts used economically, efficiently and effectively. to, engages with and leads the community. TfL also has a duty under the Local It enables TfL to monitor the achievement Government Act 1999 to make arrangements of its strategic objectives and the delivery of to secure continuous improvement in the appropriate, cost-effective services. way in which its functions are exercised, having regard to a combination of economy, The system of internal control is a significant efficiency and effectiveness. part of that framework and is designed to manage risk and provide reasonable although In discharging this overall responsibility, TfL not absolute assurance of effectiveness. is responsible for putting in place proper The system of internal control is based on arrangements for the governance of its affairs an ongoing process designed to identify and facilitating the effective exercise of its and prioritise the risks to the achievement functions, which includes arrangements for of TfL’s policies, aims and objectives, to the management of risk. evaluate the likelihood of those risks being TfL has approved and adopted a revised realised and the impact should they be Code of Governance, which is consistent realised, and to manage them efficiently, with the principles of the revised CIPFA/ effectively and economically. SOLACE Framework Delivering Good The governance framework has been in place Governance in Local Government. at TfL since the year ended 31 March 2001. It A copy of the TfL Code of Governance is remained in place up to the date of approval on our website at www.tfl.gov.uk or can be of the 2009/10 Statement of Accounts. obtained from the Corporate Governance Adviser, Windsor House, 42-50 Victoria Street, London, SW1H 0TL. This statement explains how TfL has complied with the Code and also meets the requirements of regulation 4(2) of the Accounts and Audit Regulations 2003 as amended by the Accounts and Audit (Amendment) (England) Regulations 2006 in relation to the publication of a statement on internal control.

Statement of Accounts 95 The governance framework The Commissioner of TfL, advised by his Chief Officers, is responsible and The Mayor, who serves as its Chair, accountable for the delivery of the day to day appoints the TfL Board members. The operations of TfL. The General Counsel has Board determines and agrees TfL’s strategic the overall responsibility for the operation direction and oversees the performance of of the Code and for ensuring that it is the executive team. integral to the routine functioning of TfL. The Board has five committees: In addition, the Director of Internal Audit annually comments on the adequacy and >> Finance and Policy effectiveness of the Code and the extent of TfL’s compliance with it. >> Audit TfL is working to ensure that good >> Remuneration governance is fully incorporated into the culture of the organisation and is applied >> Safety, Health and Environment Assurance consistently and transparently. >> Special Purpose Committee TfL identifies and communicates its There are four panels, made up of Board vision of its purpose and intended members, which provide strategic advice to outcomes for citizens and service the Board on the development and execution users by: of policy: >> The Mayor developing and publishing a >> Corporate Transport Strategy reflecting national and local priorities >> Rail and Underground >> The Budget and Business Plan reflecting >> Surface Transport the Transport Strategy and allocating resources accordingly >> Environment and Planning >> Reviewing on a regular basis the The Audit Committee has been delegated implications of the Transport Strategy the responsibility for overseeing corporate for its governance arrangements governance in TfL. It has received reports on the implementation of the Code of >> Ensuring that those making decisions Governance, the Annual Governance are provided with information that is fit Statement contained in these accounts for purpose – relevant, timely and gives and the results of the compliance review. clear explanations of technical issues It receives regular reports from the and their implications General Counsel and the Director of Internal >> Conducting its business on an open Audit and is responsible for the annual basis, subject only to the requirements assurance process. of appropriate levels of individual and commercial confidentiality and security

96 Transport for London – Annual Report and Statement of Accounts 2009/10 TfL measures the quality of services TfL has developed and communicates for users, ensures they are delivered in the requirements of the Code of accordance with TfL’s objectives and Conduct, defining the standards of ensures that they represent the best use behaviour for members and staff by: of resources by: >> Ensuring it is an organisation that has a >> Having in place sound systems for climate of openness, support and respect providing management information for >> Ensuring that standards of conduct performance measurement purposes and personal behaviour expected of >> Ensuring performance information is members and staff, between members collected at appropriate intervals across and staff and between TfL, its partners all activities and the community are defined and communicated through codes of conduct >> Having comprehensive and understandable and protocols performance plans in place >> Monitoring and reporting performance >> Putting in place arrangements to ensure against agreed targets that members and officers of TfL are not influenced by prejudice, bias or conflicts >> Maximising its resources and allocating of interest them according to priorities >> Ensuring that an effective process, which >> Having in place effective arrangements includes an effective Remuneration to identify and deal with failure in Committee, is in place to set the terms service delivery and conditions for remuneration of the >> Developing and maintaining an effective Commissioner and Chief Officers scrutiny function for its Investment >> Developing and maintaining shared Programme that encourages constructive values including leadership values for challenge and enhances TfL’s both the organisation and staff reflecting performance overall public expectations and communicating these to members, staff, the community TfL defines and documents the roles and and partners responsibilities of the Board, Committees, >> Putting in place arrangements to ensure Panels and officers with clear delegation that systems and processes are designed arrangements and protocols by: in conformity with appropriate ethical >> Having a documented scheme of standards, and monitors their continuing delegation that reserves appropriate effectiveness in practice responsibilities to the Board and provides >> Setting targets for performance in the officers with the authority to conduct delivery of services to ensure equality routine business for all >> Having the roles and responsibilities >> Using its shared values to act as a guide of Board members and senior officers for decision making and as a basis clearly documented

Statement of Accounts 97 for developing positive and trusting >> Substantially completing the internal relationships within TfL audit plan. Divergence from the plan is due to changes in business requirements TfL reviews and updates standing orders, standing financial instructions, TfL ensures compliance with relevant its scheme of delegation and supporting laws, internal policies and procedures, procedures that clearly define how and that expenditure is lawful by: decisions are taken and the processes >> Ensuring that all activities are legally and controls required to manage risks by: correct, fully documented, appropriately authorised and carried >> Having a clear hierarchy of governance on in a planned manner documentation whose components are regularly reviewed >> Making a senior officer responsible for ensuring that appropriate advice is >> Maintaining robust systems for identifying given in all financial matters, for keeping and evaluating all significant risks proper financial records and accounts and >> Maintaining an effective risk for maintaining an effective system of management system internal financial control >> Ensuring that risk management is >> Maintaining proper records to ensure embedded into its culture, with members that the annual accounts show a true and and officers at all levels recognising that fair view and that expenditure has been risk management is part of their jobs properly authorised and allocated in an appropriate manner TfL ensures that the core functions of >> Ensuring that a senior officer is responsible the Audit Committee are delivered by: for all activities being legally correct, fully documented and appropriately authorised >> Having an effective, independent Audit Committee >> Developing and maintaining open and effective mechanisms for documenting >> Having the Audit Committee develop evidence for decisions and recording the and maintain an effective standard of criteria, rationale and considerations on conduct overview which decisions are based >> Having an internal audit department >> Putting in place arrangements to which complies with relevant safeguard against conflicts of interest professional standards >> Ensuring that professional advice on >> Having an internal audit plan that is driven matters that have legal or financial by an annual evidenced assessment of implications is available and recorded the key business risks facing TfL well in advance of decision making and used appropriately

98 Transport for London – Annual Report and Statement of Accounts 2009/10 >> Actively recognising the limits of lawful those skills to enable roles to be carried activity placed on it but also striving out effectively and to utilise powers to the full benefit of the public >> Developing skills on a continuing basis to improve performance, including the >> Observing all legal requirements placed ability to scrutinise and challenge and to upon it and integrating the key principles recognise when outside expert advice of good public law – rationality, legality is needed and natural justice – into its procedures and decision-making processes TfL establishes clear channels of communication with all sections of the TfL has made arrangements for community and other stakeholders, whistle-blowing and for receiving and ensuring accountability and encouraging investigating complaints from the open consultation by: public by: >> Having in place proper arrangements >> Ensuring that effective, transparent designed to encourage individuals and accessible arrangements are in and groups from all sections of the place for making, receiving and dealing community to engage with, contribute to with complaints and participate in the work of TfL >> Ensuring that arrangements are in place >> Making clear to staff and the public what for whistle-blowing to which staff and all it is accountable for and to whom those contracting with TfL have access >> Publishing, publicising and making TfL identifies the development needs of generally available an annual report as soon as practicable after the end of the members and officers in relation to their financial year strategic roles, supported by appropriate training by: >> The annual report presenting an objective and understandable account >> Ensuring that its Board members and of its activities and achievements and its officers are provided with the necessary financial position and performance training to perform their roles >> Cooperating with appropriate >> Ensuring that its staff are competent to organisations to ensure there is perform their roles independent scrutiny of its financial and operational reporting processes >> Ensuring that the Chief Finance Officer has the skills, resources and support >> Having a clear policy on the types of necessary to perform effectively in issues it will consult on or engage with his role and that this role is properly the public and service users about, understood throughout TfL including a feedback mechanism for those consultees to demonstrate what >> Assessing the skills required by members has changed as a result and officers and committing to develop

Statement of Accounts 99 TfL incorporates good governance TfL’s General Counsel has the responsibility arrangements in respect of partnerships for overseeing the implementation and and other group working by: monitoring the operation of the Code and reporting annually to the Audit Committee on >> Fostering effective delivery relationships compliance with the Code and any changes and partnerships with other public sector that may be necessary to maintain it and agencies, the private and voluntary sectors ensure its effectiveness in practice. >> Establishing appropriate arrangements to In addition, the Director of Internal Audit engage with all sections of the annually comments on the adequacy and public effectively effectiveness of the Code and the extent of TfL’s compliance with it. >> Establishing appropriate arrangements to engage with interest groups such as We have been advised on the implications of financial institutions, businesses and the result of the review of the effectiveness voluntary groups to ensure they are of the governance framework by the Audit able to interact with TfL on matters of Committee, and a plan to ensure continuous mutual interest improvement of the system is in place.

The Chief Finance Officer (CFO) plays an Significant governance issues active part in TfL strategic decision making. The CFO is appointed and removed by Balancing the need to manage within the the Board: reviews all papers relating to Government settlement and deliver the financial management for the Chief Officers, Mayor’s priorities is the most significant Committees or Board in advance attends issue facing TfL and one that will continue all Board and Strategic Executive Group to present a challenge to its management. meetings and has unrestricted access to Effective governance arrangements and the Commissioner. senior officer oversight will be maintained to ensure appropriate and timely responses to such issues that arise. Review of effectiveness Other issues to be addressed during the year TfL has responsibility for conducting, at least relate to maintaining continued effective annually, a review of the effectiveness of its project delivery. Particular focus will need governance framework including the system of to be maintained on the delivery of the internal control. The review of effectiveness Investment Programme and Crossrail, which is informed by the work of the senior officers is being delivered by Crossrail Limited, a within TfL who have responsibility for the wholly-owned subsidiary of TfL. Dealing development and maintenance of the with the consequences of TfL’s proposed governance environment, the Director of acquisition of shares in Tube Lines (Holdings) Internal Audit’s annual report, and also by Limited will also be a priority. One recent comments made by the external auditors and development that will provide a significant other review agencies and inspectorates. improvement in our oversight and delivery

100 Transport for London – Annual Report and Statement of Accounts 2009/10 capability is the creation of the Investment Programme Advisory Group (IPAG). This group will provide independent and impartial advice to the Board on all aspects of the delivery of the TfL Investment Programme, including maintenance, renewal, upgrades and major projects. We propose over the coming year to continue to improve and develop our governance arrangements. We are confident that the current governance processes and planned developments will enable us to meet the challenges identified above.

Signed

Chair of TfL Board

Commissioner

Statement of Accounts 101 Independent Audit Report to Transport for London

Opinion on the Respective Responsibilities of financial statements the Chief Finance Officer and We have audited the financial statements the Auditor of Transport for London (‘the Corporation’) The Chief Finance Officer’s responsibilities and the Transport for London Group (‘the for preparing the financial statements Group’) for the year ended 31 March 2010 in accordance with applicable laws which comprise the Explanatory Foreword and regulations and the Statement of and Financial Review, the Corporation and Recommended Practice on Local Authority Group Income and Expenditure Accounts, Accounting in the United Kingdom 2009 are the Statement of Movement on the General set out in the Statement of Responsibilities. Fund Balance, the Reconciliation of the Deficit/(Surplus) on the Corporation’s Single Our responsibility is to audit the financial Entry Income and Expenditure Account to statements in accordance with relevant the Surplus on the Group Accounts, the legal and regulatory requirements and the Statement of Total Recognised Gains and International Standards on Auditing (UK Losses, the Balance Sheets, the Cash Flow and Ireland). Statements and the related notes. These We report to you our opinion as to whether financial statements have been prepared the financial statements give a true and under the accounting policies set out therein. fair view of the financial position of the This report is made solely to Transport for Corporation and the Group in accordance London, as a body, in accordance with Part II with applicable laws and regulations and the of the Audit Commission Act 1998. Our audit Statement of Recommended Practice on work has been undertaken so that we might Local Authority Accounting in the United state to Transport for London as a body, those Kingdom 2009. matters we are required to state to it in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than Transport for London, as a body, for our audit work, for this report, or for the opinions we have formed.

102 Transport for London – Annual Report and Statement of Accounts 2009/10 We review whether the Annual Governance Basis of audit opinion Statement reflects compliance with ‘Delivering We conducted our audit in accordance Good Governance in Local Government: A with the Audit Commission Act 1998, the Framework’ published by CIPFA/SOLACE in Code of Audit Practice issued by the Audit June 2007. We report if it does not comply Commission and International Standards with proper practices specified by CIPFA/ on Auditing (UK and Ireland) issued by the SOLACE or if the Statement is misleading Auditing Practices Board. or inconsistent with other information we are aware of from our audit of the financial An audit includes examination, on a test statements. We are not required to consider, basis, of evidence relevant to the amounts nor have we considered, whether the and disclosures in the financial statements. It Statement covers all risks and controls. also includes an assessment of the significant Neither are we required to form an opinion estimates and judgements made by the on the effectiveness of the Corporation’s Chief Finance Officer in the preparation of corporate governance procedures or its risk the financial statements, and of whether the and control procedures. accounting policies are appropriate to the Corporation and the Group’s circumstances, We read other information published with consistently applied and adequately disclosed. the financial statements, and consider whether it is consistent with the audited We planned and performed our audit so as to financial statements. This other information obtain all the information and explanations comprises the Annual Report. We consider which we considered necessary in order the implications for our report if we become to provide us with sufficient evidence aware of any apparent misstatements or to give reasonable assurance that the material inconsistencies with the financial financial statements are free from material statements. Our responsibilities do not misstatement, whether caused by fraud or extend to any other information. other irregularity or error. In forming our opinion, we evaluated the overall adequacy of the presentation of information in the financial statements.

Statement of Accounts 103 Opinion In our opinion the financial statements of the Corporation and the Group give a true and fair view, in accordance with applicable laws and regulations and the Statement of Recommended Practice on Local Authority Accounting in the United Kingdom 2009, of the financial position of the Corporation and the Group as at 31 March 2010 and their income and expenditure for the year then ended.

Certificate We certify that we have completed the audit of the accounts in accordance with the requirements of the Audit Commission Act 1998 and the Code of Audit Practice issued by the Audit Commission.

June Awty, Senior Statutory Auditor For and on behalf of KPMG LLP, Statutory Auditor Chartered Accountants, London 6 August 2010

104 Transport for London – Annual Report and Statement of Accounts 2009/10 Conclusion on arrangements Conclusion for securing economy, efficiency We have undertaken our audit in accordance and effectiveness with the Code of Audit Practice and we are satisfied that, in all significant respects, the The Corporation’s Responsibilities Corporation made proper arrangements to secure economy, efficiency and effectiveness The Corporation is responsible for putting in its use of resources for the year ended 31 in place proper arrangements to secure March 2010. economy, efficiency and effectiveness in its use of resources, to ensure proper stewardship and governance, and to regularly review the adequacy and effectiveness of these arrangements. June Awty, Senior Statutory Auditor Auditor’s Responsibilities For and on behalf of KPMG LLP, We are required by the Audit Commission Statutory Auditor Act 1998 to be satisfied that proper Chartered Accountants, London arrangements have been made by the 6 August 2010 Corporation for securing economy, efficiency and effectiveness in its use of resources. The Code of Audit Practice issued by the Audit Commission requires us to report to you our conclusion in relation to proper arrangements, having regard to relevant criteria specified by the Audit Commission for other local government bodies. We report if significant matters have come to our attention which prevent us from concluding that the Corporation has made such proper arrangements. We are not required to consider, nor have we considered, whether all aspects of the Corporation’s arrangements for securing economy, efficiency and effectiveness in its use of resources are operating effectively.

Statement of Accounts 105 Group Income and Expenditure Account

Group Group 2009/10 2008/09 restated* Note £m £m Highways, roads and transport services Expenditure 3 5,273.7 5,312.5 Depreciation of fixed assets 11c 801.4 707.5 Exceptional items 6 - (1,503.2) Revenue 1, 2 (3,594.3) (3,451.5) Amortisation of deferred capital grants 11c (398.6) (379.2) Net cost of services 2,082.2 686.1

Loss on disposal of assets 8 14.5 85.8 Finance income 9 (13.9) (104.6) Finance costs 9 390.7 322.1 Pensions interest cost and expected return on pensions assets 22a 98.7 41.7 Net operating expenditure 2,572.2 1,031.1

Revenue transport grant for operations 7 (1,081.8) (1,231.4) Other revenue grant (273.8) (63.4) Precept (12.0) (12.0) Deficit/(Surplus) for the year 1,204.6 (275.7)

* See Statement of Accounting Policies (Note u) Accounting for PFI transactions and similar contracts.

106 Transport for London – Annual Report and Statement of Accounts 2009/10 Corporation Income and Expenditure Account

Corporation Corporation 2009/10 2008/09 restated* Note £m £m Highways, roads and transport services Expenditure 3 922.6 1,013.3 Depreciation of fixed assets 11c 183.0 178.7 Exceptional items 6 - 104.7 Grant funding of subsidiaries for operations 1,099.3 1,030.8 Revenue 1 (447.2) (425.5) Amortisation of deferred capital grants 11c (40.0) (42.2) Net cost of services 1,717.7 1,859.8

Loss on disposal of assets 8 4.3 5.2 Finance income 9 (111.0) (160.3) Finance costs 9 175.6 123.1 Pensions interest cost and expected return on pensions assets 22a 2.9 2.3 Net operating expenditure 1,789.5 1,830.1

Revenue transport grant for operations 7 (1,081.8) (1,231.4) Other revenue grant (273.8) (63.0) Precept (12.0) (12.0) Deficit for the year 421.9 523.7

* See Statement of Accounting Policies (Note u) Accounting for PFI transactions and similar contracts.

Statement of Accounts 107 Statement of Movement on the General Fund Balance

This statement shows how the deficit on the Corporation’s Income and Expenditure Account for the year reconciles to the deficit for the year on the General Fund. Note 24 to the Statement of Accounts explains the significance of the General Fund and the reconciliation statement.

Corporation Corporation 2009/10 2008/09 restated* Note £m £m Transfer of the deficit for the year on the Income and Expenditure Account 23 421.9 523.7 Net additional amount required by statute or non-statutory proper practice to be taken into account when determining the surplus or deficit on the General Fund for the year 24 (409.4) (523.5) General Fund deficit for the year 12.5 0.2

108 Transport for London – Annual Report and Statement of Accounts 2009/10 Reconciliation of the Deficit on the Corporation’s Single Entity Income and Expenditure Account to the Deficit/(Surplus) on the Group Accounts

This statement shows how the deficit on the Corporation’s single entity Income and Expenditure Account reconciles to the deficit /(surplus) for the year on the Group Accounts.

Group Group 2009/10 2008/09 Note restated* Deficit on the Corporation’s single entity Income and Expenditure Account for the year 23 421.9 523.7 Corporation’s share of the deficit/(surplus) incurred by its subsidiaries 695.3 (787.8) Adjustment to depreciation and amortisation charge as a result of fair value adjustments arising on consolidation - (0.1) FRS 17 pensions debit/(credit) to Group Income and Expenditure Account on consolidation 87.4 (11.5) Group Accounts deficit/(surplus) for the year 1,204.6 (275.7)

* See Statement of Accounting Policies (Note u) Accounting for PFI transactions and similar contracts.

Statement of Accounts 109 Statements of Total Recognised Gains and Losses

Group Group 2009/10 2008/09 restated* Note £m £m Deficit/(surplus) on the Income and Expenditure Account for the year 1,204.6 (275.7) (Gain)/Loss arising on the revaluation of fixed assets 11a (31.8) 142.5 Revaluation realisation adjustment (1.0) - Actuarial losses on pension assets and liabilities 22b 1,001.9 530.5

Total recognised (gains) and losses for the year 23 2,173.7 397.3 Prior year adjustment* (377.1) Total recognised gains and losses recognised since last annual report 1,796.6

Corporation Corporation 2009/10 2008/09 restated* Note £m £m Deficit on the Income and Expenditure Account for the year 421.9 523.7 (Gain)/loss arising on the revaluation of fixed assets 11b (1.6) (19.9) Actuarial losses on pension assets and liabilities 22b 31.2 5.7 Total recognised (gains) and losses for the year 23 451.5 509.5 Prior year adjustment* (225.2) Total recognised gains and losses recognised since last annual report 226.3

* See Statement of Accounting Policies (Note u) Accounting for PFI transactions and similar contracts.

110 Transport for London – Annual Report and Statement of Accounts 2009/10 Group and Corporation Balance Sheets as at 31 March

Group Group Corporation Corporation 2010 2009 2010 2009 restated* restated* Note £m £m £m £m Tangible fixed assets Infrastructure and other property 15,848.5 14,526.2 2,433.4 2,457.6 Rolling stock 1,747.4 1,572.2 - - Plant and equipment 1,215.0 1,053.6 211.7 143.1 Non-operational assets 2,818.2 2,304.0 640.1 265.7 Total tangible fixed assets 11a,b 21,629.1 19,456.0 3,285.2 2,866.4 Investment in subsidiaries 12 - - 22.5 22.5 Long-term debtors 14 - - 3,083.5 2,184.9 Total long term assets 21,629.1 19,456.0 6,391.2 5,073.8 Current assets Stocks 13 18.3 20.2 2.3 2.7 Debtors 14 698.6 488.4 368.7 206.9 Short-term investments 15 1,472.5 1,967.8 1,427.8 1,925.8 Cash at bank and in hand 16 36.9 34.1 7.0 11.2 Total current assets 2,226.3 2,510.5 1,805.8 2,146.6 Current liabilities Creditors: amounts falling due within one year 17a (2,067.1) (2,079.2) (410.6) (477.0) Net current assets 159.2 431.3 1,395.2 1,669.6 Total assets less current liabilities 21,788.3 19,887.3 7,786.4 6,743.4 Creditors: amounts falling due after one year 17b (2,581.2) (2,519.5) (212.7) (219.4) Provisions for liabilities and charges 18 (617.2) (193.8) (475.2) (77.8) Borrowings due after more than one year 19 (4,117.8) (3,017.6) (4,117.8) (3,017.6) Net assets excluding grants 14,472.1 14,156.4 2,980.7 3,428.6 Deferred grants 20 (9,710.5) (8,216.2) (698.0) (724.0) Net assets excluding pension and other post-retirement liabilities 4,761.6 5,940.2 2,282.7 2,704.6 Pension and other post-retirement liabilities 22a (2,142.6) (1,147.5) (46.9) (17.3) Total net assets 2,619.0 4,792.7 2,235.8 2,687.3 Capital and reserves General fund 153.8 166.3 153.8 166.3 Earmarked reserves 878.0 1,141.7 878.0 1,141.7 Other reserves 1,587.2 3,484.7 1,204.0 1,379.3 Total capital employed 23 2,619.0 4,792.7 2,235.8 2,687.3

These accounts were approved by the Board on 23 June 2010 Chair of TfL

Statement of Accounts 111 Cash Flow Statements

Group Group Corporation Corporation 2009/10 2008/09 2009/10 2008/09 restated* restated* Note £m £m £m £m Net cash (outflow)/inflow from revenue activities c (820.1) (672.1) (528.9) (395.8) Returns on investments and servicing of finance Finance lease charges (226.1) (206.9) (11.3) (8.0) Interest paid and similar charges (162.9) (113.1) (162.7) (113.1) Interest received and investment income 39.7 109.9 136.9 165.6 (349.3) (210.1) (37.1) 44.5

Acquisitions Payments to acquire subsidiary undertakings - (148.0) - - Net cash balances acquired with subsidiary undertakings - 158.8 - - - 10.8 - -

Capital activities Transport capital grant 1,825.6 1,932.1 1,825.6 1,932.1 Third party contributions and other grant funding a 169.5 220.2 13.8 17.4 Grants to subsidiaries and joint venture for capital expenditures - - (1,805.6) (1,471.0) Payments to acquire tangible fixed assets a (2,247.0) (2,113.0) (242.1) (227.2) Receipts from sale of tangible fixed assets 105.0 18.0 57.1 2.4 (146.9) 57.3 (151.2) 253.7

Net cash outflow before financing (1,316.3) (814.1) (717.2) (97.6)

Management of liquid resources (Increase)/decrease in short-term investments b 495.3 (97.8) 498.0 (93.1)

Financing Capital element of finance lease payments (276.2) (159.4) (5.6) (6.1) Increase in loans to subsidiary companies - - (879.4) (862.8) Increase in borrowings due after more than one year b 1,100.0 1,067.4 1,100.0 1,067.4 823.8 908.0 215.0 198.5 (Decrease)/increase in cash b 2.8 (3.9) (4.2) 7.8

* See Statement of Accounting Policies (Note u) Accounting for PFI transactions and simila r contracts.

112 Transport for London – Annual Report and Statement of Accounts 2009/10 Notes to the Cash Flow Statements

a) Cash Flow Statements: reconciliation with the accounts

Group Group Corporation Corporation 2009/10 2008/09 2009/10 2008/09 restated* restated* Note £m £m £m £m Capital expenditure Additions to fixed assets 11a, b (3,139.3) (2,822.4) (661.6) (202.9) (Increase)/decrease in debtors (0.5) (25.7) 23.6 (25.0) Increase/(decrease) in creditors due within one year 114.9 15.8 (24.5) 3.8 Increase in creditors due after more than one year 0.5 0.2 0.5 0.2 Additions under finance lease arrangements 357.8 722.4 - - Increase/(decrease) in provisions and other items 419.6 (3.3) 419.9 (3.3) Capital expenditure per cash flow statement (2,247.0) (2,113.0) (242.1) (227.2)

Contributions from third parties for capital expenditure Third party contributions and other grant funding 20 164.6 236.5 14.0 17.4 (Increase)/decrease in debtors 4.9 (16.3) (0.2) - Contributions from third parties per cash flow statement 169.5 220.2 13.8 17.4

*See Statement of Accounting Policies (Note u) Accounting for PFI transactions and similar contracts.

Statement of Accounts 113 Notes to the Cash Flow Statements (continued)

b) Analysis of change in net debt

At 1 April Cash Non-cash At 31 March 2009 Movement Movement 2010 restated* Note £m £m £m £m

Group Cash at bank and in hand 16 34.1 2.8 - 36.9 Investments 15 1,967.8 (495.3) - 1,472.5 Borrowings due after more than one year 19 (3,017.6) (1,100.0) (0.2) (4,117.8) Finance lease obligations 21 (2,857.4) (81.6) - (2,939.0) Total of net debt (3,873.1) (1,674.1) (0.2) (5,547.4)

Corporation Cash at bank and in hand 16 11.2 (4.2) - 7.0 Investments 15 1,925.8 (498.0) - 1,427.8 Borrowings due after more than one year 19 (3,017.6) (1,100.0) (0.2) (4,117.8) Finance lease obligations (214.8) 5.6 - (209.2) Total of net funds (1,295.4) (1,596.6) (0.2) (2,892.2)

* See Statement of Accounting Policies (Note u) Accounting for PFI transactions and similar contracts.

114 Transport for London – Annual Report and Statement of Accounts 2009/10 c) Reconciliation of net cost of services to net cash from revenue activities

Group Group Corporation Corporation 2009/10 2008/09 2009/10 2008/09 restated* restated* Note £m £m £m £m Net cost of services (2,082.2) (686.1) (1,717.7) (1,859.8) Finance lease creditor write off 6 - (1,705.5) - - Diminution in value of fixed assets 1.1 0.1 - - Depreciation net of associated release of deferred grants 11c 402.8 328.3 143.0 136.5 Goodwill write off 6 - 97.6 - - (Increase)/decrease in stocks 1.9 (0.9) 0.4 (0.6) (Increase)/decrease in debtors (249.7) (7.3) (216.6) 38.8 Decrease in amounts due to subsidiary companies - - (67.5) (12.1) Increase/(decrease) in creditors due within one year (145.0) 78.6 (15.8) 5.8 Increase/(decrease) in creditors due after more than one year (0.1) 4.6 19.4 3.8 Increase/(decrease) in provisions for liabilities and charges 3.8 (13.8) (22.4) 0.5 Decrease in pension and post- retirement liabilities (105.5) (94.3) (4.5) (0.8) Net cash outflow from revenue activities before grant (2,172.9) (1,998.7) (1,881.7) (1,687.9)

Transport revenue grant 7 1,081.8 1,231.4 1,081.8 1,231.4 Other revenue grant 259.0 83.2 259.0 48.7 Precept 12.0 12.0 12.0 12.0

Net cash outflow from revenue activities (820.1) (672.1) (528.9) (395.8)

*See Statement of Accounting Policies (Note u) Accounting for PFI transactions and similar contracts.

Statement of Accounts 115 Statement of Accounting Policies

a) Code of practice The Group accounts presented with the Corporation's accounts consolidate the individual accounts of The accounts have been prepared in accordance with Transport for London and its subsidiary undertakings. the Code of Practice on Local Authority Accounting in the United Kingdom 2009 (‘the SORP’), developed A subsidiary undertaking is an entity over which the by the Chartered Institute of Public Finance and Group exercises control. TfL exercises control over all Accountancy (CIPFA) and the Local Authority of its subsidiaries through holding 100 per cent of the () Accounts Advisory Committee (LASAAC) voting interests either directly or through intermediate Joint Committee and approved by the Accounting holding companies. Standards Board. Merger accounting principles are applied where transfers into the Group of subsidiary undertakings, b) Changes in accounting policies including statutory transfers, have the characteristics The 2009 SORP introduced major changes to the of group reconstructions in accordance with Financial accounts for local authorities and similar bodies when Reporting Standard 6 – Acquisitions and Mergers. With accounting for PFI transactions and similar contracts merger accounting, the carrying values of the assets for accounting periods commencing on or after 1 and liabilities of the parties to the combination are not April 2009 as well as impacting the comparative required to be adjusted to fair value on consolidation, period starting on or after 1 April 2008. The new although appropriate adjustments are made to achieve accounting policy is fully dealt with below in note uniformity of accounting policies where necessary. u). The cumulative impact of the restatements In other cases, the acquisition method of accounting relating to prior years has been recognised in the is adopted. Under this method, the identifiable assets accounts as a prior year adjustment and comparative and liabilities of an acquired entity are recorded at figures for 2008/09 have been restated. The effect their fair values at the date of acquisition. The results of implementing the new accounting policy was to of subsidiary undertakings acquired or disposed of are decrease the deficit for the year on the Group Income included in the Group income and expenditure account and Expenditure Account by £44m (2008/09 decrease from the date of acquisition until the date of disposal. the surplus by £1m) (Corporation increase the deficit by £10m, 2008/09 increase the deficit by £10m) and e) Segmental reporting to increase Group total net assets at 31 March 2010 by £421m (31 March 2009 £377m) (Corporation The Group’s primary reporting segments comprise increase net assets by £215m, 2009 £225m). business segments and there are no geographical segments. Business segments are based on the internal c) Basis of accounting management structure of the organisation. They reflect components of the Group with distinguishable The accounts are made up to 31 March. The revenues, costs and assets and are subject to risks Corporation is a single service authority and all different to those of other reportable segments. expenditure is attributable to the provision of highways, roads and transport services. f) Revenue recognition and expenditure The accounts have been prepared on the historical cost basis, except for the revaluation of certain Sales revenue on trading activities comprises the value properties and financial instruments. The principal of sales of services or goods in the normal course accounting policies adopted are set out below. of business, exclusive of Value Added Tax. The main source of revenue is ticket sales deriving from the d) Basis of preparation of group accounts provision of public transport in the London area and income from related services. Turnover also includes The SORP requires local authorities with, in aggregate, amounts receivable from the London Borough material interests in subsidiary and associated Councils and County authorities in respect of free companies and joint ventures, to prepare group and reduced fare travel for the elderly and disabled. accounts consistent with UK GAAP. Revenue is recognised on an earned basis and revenue

116 Transport for London – Annual Report and Statement of Accounts 2009/10 received in advance is spread over the period to h) Tangible fixed assets which it relates. Revenue earned by franchisees, or All expenditure (excluding routine repairs and contractors, providing transport services on behalf of maintenance) on the acquisition of capital assets, the Group is not taken into account, except in the or expenditure which significantly adds to the value, limited circumstances where the Group shares the risk capacity in use, or useful economic life of existing of revenue volatility with the franchisee. assets, is capitalised as a fixed asset on an accruals basis. Fixed assets are classified as operational assets g) Grants and other funding (those presently used for the delivery of public The main source of grant is Transport Grant, which is services or for support tasks) and non-operational non-specific in that it is applied both to maintaining assets (surplus property awaiting sale and assets services and to fund capital expenditure. under construction).

In the accounts of the Corporation, Transport Grant is Operational assets divided into three elements: Infrastructure consists of roads, tunnels, viaducts, >> The element used to finance revenue expenditure bridges, stations, track, signalling and bus stations and in the Corporation, including grants to subsidiaries stands. Infrastructure, rolling stock and equipment to finance their own revenue expenditure are carried at their fair value when transferred to the Group, together with the cost of subsequent >> The element used to finance capital expenditure additions. The fair values have been calculated on the in the Corporation, which is accounted for as basis of depreciated replacement cost. described below London Underground assets are carried at the >> The element used to finance capital expenditure estimated cost of modern equivalent assets as at 31 in the subsidiaries, which is not accounted for March 1998, together with the cost of subsequent in the Corporation’s income and expenditure additions, written down to reflect their remaining account, but is shown in the Corporation’s cash estimated useful lives. Bored tunnels, excavations for flow statement under Capital activities stations, and embankments entering service in London In the accounts of the Corporation and the Group, Underground prior to 1 April 1992 are carried at nil grants applied for revenue purposes are accounted value as there are no records of their historical cost for in the year in which they arise, in common with and it is impractical to provide a reliable valuation. other income, and are credited to the income and expenditure account. Other property consists of business properties, used by the Group for its own purposes, which are not Grants and other contributions for capital expenditure limited in their future use by operational constraints are accounted for on an accruals basis and recognised or requirements and which are not integral to the in the accounts when the conditions for their receipt infrastructure (e.g. offices). These properties were have been complied with and there is reasonable valued at open market value at 31 March 2010 (on assurance that the grant or contribution will be received. an existing use basis) by the Director of TfL Group Property and Facilities and by suitably qualified TfL Where expenditure on fixed assets is financed either staff. The revaluation is taken to the fixed asset wholly or partly by grants or other contributions, the revaluation reserve. amount of the grant is credited initially to the deferred capital grants account. Amounts are released over the Non-operational assets useful life of the asset to match the depreciation on These assets consist of investment properties the asset to which it relates. commercially let and capable of being separated from operational property (eg offices, shops, residential property and disused operational property awaiting disposal), property awaiting disposal and assets

Statement of Accounts 117 Statement of Accounting Policies (continued)

under construction. The investment properties on this liability is included in interest payable in the and properties awaiting disposal are valued like Group income and expenditure account. other property but with additional consideration of alternative uses. Assets under construction are carried Service charges paid by London Underground to at historical cost and are not depreciated until they the PPP contractors are allocated to the income come into use. and expenditure account to reflect management’s estimate of the value of operating services received, Depreciation with the balance applied to amortise the finance lease Assets are depreciated on a straight-line basis over creditor over the term of the contract. Performance their estimated useful lives, which are reviewed adjustments to the service charges are also recorded regularly, and which for the major categories fall in the within expenditure charged to revenue. following ranges: Assets in course of construction Tunnels and embankments up to 100 years These assets are carried at cost and are not depreciated Bridges and viaducts up to 100 years until they are available for customer service. They Track up to 50 years include expenditure on new and extended railway lines Road pavement up to 15 years and major expansions to stations. Road foundations up to 50 years Signalling 15-40 years i) Goodwill Stations up to 50 years Where the cost of a business combination exceeds Other property 20-50 years the fair values attributable to the net assets acquired, Rolling stock 30-50 years the resulting goodwill is capitalised and tested for Lifts and escalators 25-40 years impairment whenever indicators exist that the carrying Plant and equipment 3-40 years value may not be recoverable. Goodwill is amortised Computer equipment 3 years over 20 years. Goodwill is allocated to income- generating units for the purposes of impairment testing. Leasehold properties are amortised over the shorter of the lease term and 40 years. Property awaiting disposal is not depreciated. j) Intangible assets other than goodwill The Group does not capitalise internally generated London Underground Public Private intangible assets, including research and Partnership (PPP) development costs. Purchased software is also London Underground has three Public Private not capitalised, unless it is not separable from an Partnership (PPP) contracts. Under these contracts, item of related hardware. existing London Underground assets are allocated to the PPP contractors for a 30 year period from when k) Stocks the contracts were established, during which the Stocks consist primarily of fuel, uniforms, and PPP contractors maintain, enhance and replace these materials required for the operation and maintenance assets. London Underground pays service charges to of infrastructure. Stocks are included in the balance the PPP contractor. Since the acquisition of the assets sheet at cost less provision for obsolescence. of the Metronet Infracos in May 2008, two of these Equipment and materials held for use in a capital PPP contracts are now intra-group. programme are accounted for as stock until they are London Underground retains substantial risks and issued to the project, at which stage they become rewards of ownership of the assets allocated to the part of assets under construction. PPP contractors during the contract term. These assets continue to be recorded as fixed assets in l) Financial assets the Group accounts. Similarly, new assets acquired Financial assets are classified into two types: or constructed by the PPP contractors for London Underground are recorded as fixed asset additions in >> Loans and receivables – assets that have fixed or the Group accounts and a corresponding liability is determinable payments but are not quoted in an recorded as a finance lease creditor within creditors active market in the Group accounts. An imputed finance charge

118 Transport for London – Annual Report and Statement of Accounts 2009/10 >> Available-for-sale assets – assets that have a Increases/decreases in fair value are recognised quoted market price and/or do not have fixed or in the statement of total recognised gains and determinable payments losses (STRGL) and transferred to the Available-for- sale Reserve. The exception is where impairment Loans and receivables losses have been incurred or the asset has been Loans and receivables are initially measured at fair derecognised – these are debited/credited to the value and carried at their amortised cost. Annual income and expenditure account together with credits to the income and expenditure account for earlier losses less the gains for the asset previously interest receivable are based on the carrying amount accumulated in the Available-for-sale Reserve. of the asset multiplied by the effective rate of interest for the instrument. All loans and receivables are shown in the balance sheet at the outstanding m) Financial liabilities principal receivable plus the difference between Financial liabilities are initially measured at fair value interest credited to the income and expenditure and carried at their amortised cost. Annual charges account and interest received. to the income and expenditure account for interest payable are based on the carrying amount of the Where loans and receivables are impaired, arising from liability, multiplied by the effective rate of interest for a past event, they are written down and a charge made the instrument. to the income and expenditure account. Provision is made for bad and doubtful debts, and uncollectible Instruments entered into before 1 April 2006 debts are written off to net cost of services. There are a number of financial guarantees, referred to in Note 29, that are not required to be accounted Any losses/gains that arise on the derecognition of for as financial instruments. They are reflected in the the asset are debited/credited to the income and Statement of Accounts to the extent that provisions expenditure account. Derecognition arises when the are required or a contingent liability note is needed asset is sold or otherwise disposed of. under the policies set out in paragraph o).

Available-for-sale assets Guarantees entered into after 1 April 2006 are initially Available-for-sale assets are initially measured and measured at fair value and carried at the higher carried at fair value. Where fair value cannot be of amortised cost or any amount required to be measured reliably, the instrument is carried at cost recognised under provisions and contingencies. (less any impairment losses). Where the asset has fixed or determinable payments, annual credits to the income and expenditure account for interest n) Borrowings receivable are based on the amortised cost of the Long term borrowings are carried in the Corporation asset multiplied by the effective rate of interest and Group balance sheets net of discounts and issue for the instrument. Where there are no fixed or costs. These discounts and issue costs are amortised determinable payments, income (eg dividends) is to revenue over the duration of the debt. In the credited to the income and expenditure account income and expenditure accounts, this charge is made when it becomes receivable. through interest payable. Assets recorded in the balance sheet at fair value are o) Provisions and contingencies based on the following principles: Provisions are recognised in respect of liabilities which >> Instruments with quoted market prices – exist at the balance sheet date where the amount or the market price date of payment is uncertain. They are charged to net cost of services in the year that they are recognised. >> Other instruments with fixed and determinable payments – the total value of the discounted The Group has a number of uncertainties surrounding cash flows projects, including claims in the course of >> Equity shares with no quoted market prices – negotiations, which may affect the financial outcome. independent appraisal of company valuations Where it is possible but not probable that a liability exists at the balance sheet date, or where the liability cannot be reliably estimated, no provision is made

Statement of Accounts 119 Statement of Accounting Policies (continued)

and a contingent liability is disclosed in the accounts. Expenditure Account is different from that on the Contingent liabilities are monitored to ensure that, General Fund surplus or deficit for the year. where a possible obligation has become probable or a transfer of economic benefits has become probable, Two reserves are required to be maintained: a provision is made. The Statement of Accounts >> The Available-for-Sale Financial Instruments includes provisions based on management's best Reserve – records unrealised revaluation estimate of the outcome of these uncertainties (see gains arising from holding available-for-sale Note 18). investments, plus any unrealised losses that have not arisen from impairment of the assets p) Reserves >> The Financial Instruments Adjustment Account The capital accounting regime requires the – provides a balancing mechanism between the maintenance of two special reserve accounts in the different rates at which gains and losses (such as balance sheet: premiums on the early repayment of debt) are recognised under the SORP and are required by >> The Revaluation Reserve, which represents the statute to be met from the General Fund. net gain arising on the periodic revaluation of fixed assets These reserves are matched by borrowings and investments within the Balance Sheet and do not >> The Capital Adjustment Account, which reflects represent resources available to the Corporation. the difference between the cost of fixed assets consumed and the capital financing set aside to pay for them q) Insurance The Group maintains certain insurance policies for The depreciation charge to the income and damage to and loss of owned/third party property expenditure account in the Corporation on the current and for its potential liabilities to employees and third value of fixed assets is met by an appropriation from parties. In addition, the Group selectively self-insures the Capital Adjustment Account. Revaluation gains are its exposures under the above policies and to other depreciated, with an amount equal to the difference risks. Provision is made for the estimated value of the between current value depreciation charged on assets Group’s liability in respect of self-insured losses. and the depreciation that would have been chargeable based on their historical cost being transferred each year from the Revaluation Reserve to the Capital r) Pensions Adjustment Account. These two reserve account The Group’s employees are members of a number of balances do not form part of the resources available defined benefit schemes. In accordance with FRS 17, to the Group and Corporation. the regular service cost of pension provision relating to the period, together with the cost of any benefits Transport for London sets aside specific amounts relating to past service, is charged to the Group income as earmarked reserves for future policy purposes and expenditure account. A charge equal to the or to cover contingencies. Reserves are created increase in the present value of the schemes’ liabilities by appropriating amounts from the General Fund. (because the benefits are closer to settlement) and a When expenditure to be financed from earmarked credit equivalent to the Group's long-term expected reserves is incurred, it is charged to the income and return on assets (based on the market value of the expenditure account in that year and included in schemes’ assets at the start of the period), is included Net Cost of Services. A corresponding amount is in the income and expenditure account. then appropriated back into the General Fund from earmarked reserves so that there is no net impact on The difference between the market value of the assets the General Fund surplus or deficit for the year. of the schemes and the present value of accrued pension liabilities is shown as an asset or liability, net The accounting requirements for financial instruments of deferred tax. Any difference between the expected are similar to those for fixed assets, in that financial return on assets and that actually achieved is assets are required to be carried at fair value (unless recognised in the statement of total recognised gains they have fixed or determinable payments but are and losses along with differences which arise from not quoted in an active market) and the outcome experience or assumption changes. of proper accounting practices for the Income and

120 Transport for London – Annual Report and Statement of Accounts 2009/10 For certain defined benefit schemes, the Corporation TfL therefore recognises PFI assets as items of and/or the Group is unable to identify its share of property, plant and equipment together with a liability the underlying assets and liabilities of the scheme to pay for them. The fair values of services received on a consistent and reasonable basis. Under FRS under the contract are recorded as operating expenses. 17, these schemes are accounted for as defined The annual unitary payment is separated into the contribution schemes. following component parts, using appropriate s) Taxation estimation techniques where necessary: a) The service charge element Current tax assets and liabilities are measured at the b) Repayment of the liability amount expected to be recovered from or paid to the tax authorities, based on tax rates and laws that c) The interest element (using the interest rate implicit are enacted or substantively enacted at the balance in the contract) sheet date. Services received The fair value of services received in the year is Provision is made within the Group accounts for recorded under the relevant expenditure headings deferred taxation arising from timing differences within ‘operating expenses’. between profits or losses as computed for taxation purposes and profits or losses as stated in the PFI Asset Accounts to the extent it is payable or recoverable in The PFI assets are recognised as property, plant and the foreseeable future. equipment, when they come into use. The assets are measured initially at fair value in accordance with the t) Leases principles of FRS15. Where the operator enhances property already Assets held under finance leases are included in recognised in the Balance Sheet, the fair value of the tangible fixed assets and are depreciated on a straight- enhancement in the carrying value of the property is line basis over their estimated useful lives. Rentals recognised as an asset. payable are apportioned between the finance charge and a reduction of the outstanding obligation for PFI liability future amounts payable the finance charge being A PFI liability is recognised at the same time as the PFI allocated to accounting periods over the lease term assets are recognised. It is measured initially at the so as to produce a constant rate of charge on the same amount as the fair value of the PFI assets and is remaining balance of the obligation. subsequently measured as a finance lease liability in accordance with SSAP 21. The Group has also entered into operating leases An annual finance cost is calculated by applying the in respect of properties, rolling stock and motor implicit interest rate in the lease to the opening lease vehicles. Rentals payable under operating leases have liability for the period, and is charged to ‘Finance been accounted for in the period to which they relate. Costs’ within the Income and Expenditure Account. Note u) below deals with PFI agreements. The element of the annual unitary payment that is allocated as a finance lease rental is applied to meet u) Private Finance Initiative (PFI) the annual finance cost and to repay the lease liability transactions and similar contracts over the contract term. Life cycle replacement The 2009 SORP introduced new requirements for Components of the asset replaced by the operator accounting for infrastructure PFI schemes where during the contract (‘lifecycle replacement’) are the local authority or similar body controls the use capitalised where they meet the Group’s criteria for of the infrastructure and the residual interest in capital expenditure. They are capitalised at the time the infrastructure at the end of the arrangement. they are provided by the operator and are measured These arrangements are now to be treated as service initially at their fair value. concession arrangements, following the same requirements as under IFRIC 12 (an interpretation Off balance sheet PFI arrangements which are under IFRS). accounted for as operating leases are dealt with as detailed in note t) above.

Statement of Accounts 121 Notes to the Accounts

1 Segmental analysis

Gross Gross Gross Gross Net Net Revenue Revenue Services Services Expenditure Expenditure 2009/10 2008/09 Expenditure Expenditure 2009/10 2008/09 2009/10 2008/09 restated* restated* £m £m £m £m £m £m London Streets 366.0 398.8 (881.5) (882.1) (515.5) (483.3) Other 81.2 26.7 (184.2) (267.8) (103.0) (241.1) Corporation 447.2 425.5 (1,065.7) (1,149.9) (618.5) (724.4)

Subsidiary operations Bus operations 1,165.7 1,101.8 (1,850.9) (1,821.6) (685.2) (719.8) London Underground 1,795.5 1,769.0 (2,386.9) (2,308.1) (591.4) (539.1) Docklands Light Railway 80.0 63.9 (92.7) (85.7) (12.7) (21.8) Rail for London 45.6 42.5 (143.1) (135.2) (97.5) (92.7) Tramtrack Croydon 16.7 13.2 (30.1) (21.1) (13.4) (7.9) Crossrail - 0.1 (7.2) (7.4) (7.2) (7.3) Other 43.6 35.5 (99.9) (111.8) (56.3) (76.3) Group 3,594.3 3,451.5 (5,676.5) (5,640.8) (2,082.2) (2,189.3)

Gross services expenditure includes depreciation net of amortisation of deferred capital grants, but excludes for the Corporation grant funding of subsidiaries. It also excludes exceptional items (see Note 6).

Net expenditure represents net cost of services for the Group excluding exceptional items, and net cost of services excluding exceptional items, grant funding of subsidiaries for the Corporation i.e. net cost of services for those services provided directly by the Corporation.

* See Statement of Accounting Policies (Note u) Accounting for PFI transactions and similar contracts.

122 Transport for London – Annual Report and Statement of Accounts 2009/10 2 Revenue

a) Group revenue 2009/10 2008/09 £m % of total £m % of total Fares 2,665.9 74.2 2,577.5 74.8 Revenue in respect of free travel for elderly and disabled people 240.7 6.7 227.2 6.6 Congestion Charging 312.6 8.7 325.7 9.4 Charges to London boroughs 13.3 0.4 13.3 0.4 Charges to transport operators 8.6 0.2 8.6 0.2 Bus enforcement 32.3 0.9 46.8 1.4 Commercial advertising receipts 92.2 2.6 82.7 2.4 Rents receivable 56.6 1.6 60.1 1.7 Taxi licensing 18.5 0.5 18.3 0.5 Museum income 4.8 0.1 4.3 0.1 Other 148.8 4.1 87.0 2.5 Total revenue 3,594.3 100.0 3,451.5 100.0

b) Congestion Charging Group and Group and Corporation Corporation 2009/10 2008/09 £m £m Revenue 312.6 325.7 Direct expenditure: Toll facilities and traffic management (144.4) (167.2) 168.2 158.5 Other expenditure: Financial assistance - (0.9) Administration, support services & depreciation (10.1) (9.1) Net income on Congestion Charging 158.1 148.5

The net revenues from the Congestion Charge are spent on improving transport in line with the Mayor’s Transport Strategy.

Statement of Accounts 123 Notes to the Accounts (continued)

3 Expenditure (before exceptional items)

Group Group Corporation Corporation 2009/10 2008/09 2009/10 2008/09 restated* restated* Note £m £m £m £m Staff costs: Wages and salaries 1,075.9 1,053.1 158.5 152.6 Social security costs 87.8 88.0 13.3 13.3 Pension costs 22a 140.8 167.6 39.8 36.5 1,304.5 1,308.7 211.6 202.4 Operating leases 73.8 65.8 4.6 4.2 PFI charges 163.7 173.7 3.7 3.7 Financial assistance 4 181.7 190.3 181.7 190.3 Supplies and services 6,689.3 6,396.4 1,182.6 815.6 8,413.0 8,134.9 1,584.2 1,216.2 Capital expenditure 11a, b (3,139.3) (2,822.4) (661.6) (202.9) Expenditure charged to revenue 5,273.7 5,312.5 922.6 1,013.3

Group Group Corporation Corporation 2009/10 2008/09 2009/10 2008/09 Number Number Number Number Average number of employees: Permanent employees (including those on fixed term contracts) 25,126 25,675 3,508 3,420 Agency staff 2,290 3,004 385 713 Average number of employees 27,416 28,679 3,893 4,133

Group Group Corporation Corporation 2009/10 2008/09 2009/10 2008/09 £m £m £m £m The cost of services include the following amounts: Auditors’ remuneration for statutory audit services 1.6 1.7 0.4 0.6 Auditors’ remuneration for non-statutory audit services - 0.3 - 0.1 Auditors’ remuneration for non-audit services 0.4 0.1 0.2 - 2.0 2.1 0.6 0.7

Operating leases The Group leases certain properties on short-term and long-term leases. The rents payable on these leases were £54.2m (2008/09 £58.4m). The rents payable under these leases are subject to renegotiation at various intervals specified in the leases. The Group pays all insurance, maintenance and repairs of these properties. Total other operating lease rentals for the Group included in the income and expenditure account were £19.6m (2008/09 £7.4m). Payments under these lease agreements, which include the cost of routine maintenance and repairs, are charged to revenue over the period of the leases from the time the assets become operational. * See Statement of Accounting Policies (Note u) Accounting for PFI transactions and similar contracts.

124 Transport for London – Annual Report and Statement of Accounts 2009/10 4 Financial assistance TfL may give financial assistance to any body or person in respect of expenditure incurred or to be incurred by that body or person in doing anything which, in the opinion of TfL, is conducive to the provision of safe, integrated, efficient and economic transport facilities or services to, from or within Greater London.

Financial assistance given under section 159 of the Greater London Authority Act 1999 is outlined below:

Corporation Corporation 2009/10 2008/09 Note £m £m Financial assistance to subsidiaries Transport Trading Limited 189.6 125.4 London Underground Limited 1,886.4 1,546.7 London Bus Services Limited 705.0 762.2 London Buses Limited 0.3 1.4 Docklands Light Railway Limited 208.3 213.6 Rail for London Limited 492.0 459.0 Victoria Coach Station Limited - 0.6 Tramtrack Croydon Limited 4.3 9.2 London Transport Museum Limited 5.6 6.4 Crossrail Limited 283.7 91.9 3,775.2 3,216.4

Financial assistance to London boroughs and other third parties London Investment Programme 153.1 170.4 Taxicard 12.5 11.9 Three Mills Lock - 1.2 Olympics Velopark - 2.5 Safety schemes 5.2 - Cycle network 4.7 - Other schemes 6.2 4.3 3 181.7 190.3

Statement of Accounts 125 Notes to the Accounts (continued)

5 Remuneration a) Employees’ remuneration

The SORP requires the disclosure of remuneration for the Corporation’s employees only. The impact of the transfer of employees into and out of the Corporation from subsidiaries can cause distortion for year on year comparison purposes. Consequently, an additional voluntary disclosure for the Group is provided that shows the combined employee bands for TfL and its subsidiaries.

Disclosure is required for 2009/10 in rising bands of £5,000, rather than £10,000 as in previous years. The prior year comparatives have therefore been restated. The prior year comparatives also include employees of the former Metronet businesses. The remuneration for those employees was included for a full year, even though they were only employees of the Group from 27 May 2008, in order to facilitate comparison with future years. Those individuals who left the employment of the Metronet Infracos prior to 27 May 2008 are not included in the Group salary bandings. The disclosure in note 5a includes all senior employees also included in note 5b.

Employees’ remuneration, which includes their salaries, fees, performance-related pay, benefits in kind, lump sums and termination payments, but excludes pension contributions paid by the employer, fell within the following bands:

Group Group Corporation Corporation 2009/10 2008/09 2009/10 2008/09 restated restated £ Number Number Number Number 50,000 – 54,999 1,406 1,369 157 166 55,000 – 59,999 901 875 128 130 60,000 – 64,999 572 587 106 103 65,000 – 69,999 403 344 80 70 70,000 – 74,999 249 248 66 55 75,000 – 79,999 205 192 43 52 80,000 – 84,999 124 135 27 37 85,000 – 89,999 116 87 30 22 90,000 – 94,999 84 85 25 31 95,000 – 99,999 59 51 12 13 100,000 – 104,999 35 46 11 18 105,000 – 109,999 43 29 11 11 110,000 – 114,999 29 21 6 5 115,000 – 119,999 17 19 5 4 120,000 – 124,999 11 16 3 7 125,000 – 129,999 10 9 5 3 130,000 – 134,999 20 11 5 3 135,000 – 139,999 9 13 2 5 140,000 – 144,999 9 10 2 3 145,000 – 149,999 10 8 3 2 150,000 – 154,999 9 6 1 2 155,000 – 159,999 3 4 - 1 160,000 – 164,999 6 4 1 -

126 Transport for London – Annual Report and Statement of Accounts 2009/10 Group Group Corporation Corporation 2009/10 2008/09 2009/10 2008/09 restated restated £ Number Number Number Number 165,000 – 169,999 2 5 1 1 170,000 – 174,999 7 2 3 2 175,000 – 179,999 4 7 2 6 180,000 – 184,999 4 1 1 1 185,000 – 189,999 1 - - - 190,000 – 194,999 - 2 - - 195,000 – 199,999 1 1 - - 200,000 – 204,999 - 1 - 1 205,000 – 209,999 5 - 2 - 210,000 – 214,999 1 3 1 1 215,000 – 219,999 1 - - - 225,000 – 229,999 2 1 1 - 230,000 – 234,999 3 - - - 235,000 – 239,999 - 1 - - 240,000 – 244,999 - 1 - 1 255,000 – 259,999 1 1 - 1 260,000 – 264,999 - 1 - - 265,000 – 269,999 2 - 1 - 270,000 – 274,999 - 2 - 1 280,000 – 284,999 1 - 1 - 285,000 – 289,999 - 1 - 1 310,000 – 314,999 1 - 1 - 320,000 – 324,999 1 - - - 355,000 – 359,999 - 1 - 1 390,000 – 394,999 1 1 1 - 410,000 – 414,999 - 1 - 1 475,000 – 479,999 - 1 - 1 515,000 – 519,999 1 - 1 - 550,000 – 554,999 1 - - - 575,000 – 579,999 - 1 - - Total 4,370 4,204 745 762 b) Remuneration for senior employees The Accounts and Audit (Amendment No. 2) (England) Regulations 2009 introduce a new legal requirement for disclosure of individual remuneration details for senior employees. Senior employees are those with a base salary of £150,000 or more, calculated on a full time equivalent basis for those working part-time.

Disclosure is made for each financial year under various categories, and set out on the following pages.

Employer’s pension contributions include the contribution in respect of future benefit accrual. Separately, member contributions are payable by employees at the rate of five per cent of pensionable salary.

Statement of Accounts 127 Notes to the Accounts (continued)

Total Salary Performance- remuneration Salary Performance- (including related pay Compensation excluding Employer's (including related pay fees and for 2008/09 for loss of Benefits pension contribution fees and for 2007/08 allowances paid in year employment in kind contributions to pension allowances) paid in year 2009/10 2009/10 2009/10 2009/10 2009/10 2009/10 2008/09 2008/09 Notes £ £ £ £ £ £ £ £

Current employees excluding Crossrail Peter Hendy, Commissioner a 330,198 61,466 - 1,887 393,551 - 330,140 146,440 Steve Allen, Managing Director, Finance 253,436 56,592 - 573 310,601 45,551 238,334 48,080 David Brown, Managing Director, Surface Transport b 271,353 43,415 - 1,887 316,655 60,900 270,900 58,513 Ian Brown, Managing Director, London Rail 205,719 48,664 - 1,542 255,925 44,892 205,376 55,510 Mike Brown, Managing Director, London Underground c 60,556 - - 79 60,635 - - - Howard Carter, General Counsel 217,081 49,588 - 1,887 268,556 45,914 216,720 55,438 Michèle Dix, Managing Director, Planning d 145,740 32,660 - 1,887 180,287 37,319 145,740 33,352 Vernon Everitt, Managing Director, Group Marketing and Communications e 228,235 53,797 - 1,887 283,919 26,791 227,854 127,610 Richard Parry, Interim Managing Director, London Underground f 184,709 - - - 184,709 36,450 - - Sarah Atkins, Director of Reviews and Legal, London Underground g 155,615 27,000 - 1,542 184,157 41,885 155,355 8,000 Ian Campbell, Chief Information Officer h 18,973 - - 271 19,244 4,925 - - Howard Collins, Chief Operating Officer, London Underground 194,186 24,000 - 1,542 219,728 41,787 140,733 19,019 Stephen Critchley, Chief Finance Officer 159,488 20,000 - - 179,488 41,770 158,411 20,434 Frank Douglas, Group Human Resources Director i 24,795 - - - 24,795 2,056 - - Robert Doyle, Head of Track and Signals, London Underground 172,739 9,389 - 1,542 183,670 27,722 172,623 17,047 Gerald Duffy, Director of Employee Relations, London Underground 150,913 22,000 - 573 173,486 41,308 150,626 24,539 Garrett Emmerson, Chief Operating Officer Streets, Surface Transport j 160,403 12,090 - 573 173,066 41,770 96,566 - David Hendry, Finance Director, Surface Transport 151,139 20,000 - 1,542 172,681 41,272 150,641 - Philip Hufton, Chief Maintenance Officer, London Underground 232,891 35,000 - - 267,891 27,722 205,883 31,200 Ben Plowden, Director of Better Routes and Places, Surface Transport 174,522 35,100 - - 209,622 44,658 183,042 34,816 Peter Regan, Corporate Finance Director 154,469 71,153 - 573 226,195 40,273 154,258 47,600 Geoff Virrels, Commercial Adviser, London Underground k 130,886 - - 1,542 132,428 98,740 181,149 43,920 David Waboso, Director of Line Upgrades, London Underground 177,888 27,500 - 1,542 206,930 44,112 177,529 34,000

Notes a Salary sacrificed for pension of £17,132 (2008/09 £16,612) b Performance-related pay of £12,000 (2008/09 nil) sacrificed to pension fund c Entered service 22 March 2010 d Part-time, three days per week e Performance-related pay paid in 2008/09 includes a one-off performance award agreed in June 2007 f Appointed as Interim Managing Director, London Underground 1 May 2009. The table only includes amounts relating to Interim Managing Director role as previous salary was below £150,000

128 Transport for London – Annual Report and Statement of Accounts 2009/10 Total Salary Performance- remuneration Salary Performance- (including related pay Compensation excluding Employer's (including related pay fees and for 2008/09 for loss of Benefits pension contribution fees and for 2007/08 allowances paid in year employment in kind contributions to pension allowances) paid in year 2009/10 2009/10 2009/10 2009/10 2009/10 2009/10 2008/09 2008/09 Notes £ £ £ £ £ £ £ £

Current employees excluding Crossrail Peter Hendy, Commissioner a 330,198 61,466 - 1,887 393,551 - 330,140 146,440 Steve Allen, Managing Director, Finance 253,436 56,592 - 573 310,601 45,551 238,334 48,080 David Brown, Managing Director, Surface Transport b 271,353 43,415 - 1,887 316,655 60,900 270,900 58,513 Ian Brown, Managing Director, London Rail 205,719 48,664 - 1,542 255,925 44,892 205,376 55,510 Mike Brown, Managing Director, London Underground c 60,556 - - 79 60,635 - - - Howard Carter, General Counsel 217,081 49,588 - 1,887 268,556 45,914 216,720 55,438 Michèle Dix, Managing Director, Planning d 145,740 32,660 - 1,887 180,287 37,319 145,740 33,352 Vernon Everitt, Managing Director, Group Marketing and Communications e 228,235 53,797 - 1,887 283,919 26,791 227,854 127,610 Richard Parry, Interim Managing Director, London Underground f 184,709 - - - 184,709 36,450 - - Sarah Atkins, Director of Reviews and Legal, London Underground g 155,615 27,000 - 1,542 184,157 41,885 155,355 8,000 Ian Campbell, Chief Information Officer h 18,973 - - 271 19,244 4,925 - - Howard Collins, Chief Operating Officer, London Underground 194,186 24,000 - 1,542 219,728 41,787 140,733 19,019 Stephen Critchley, Chief Finance Officer 159,488 20,000 - - 179,488 41,770 158,411 20,434 Frank Douglas, Group Human Resources Director i 24,795 - - - 24,795 2,056 - - Robert Doyle, Head of Track and Signals, London Underground 172,739 9,389 - 1,542 183,670 27,722 172,623 17,047 Gerald Duffy, Director of Employee Relations, London Underground 150,913 22,000 - 573 173,486 41,308 150,626 24,539 Garrett Emmerson, Chief Operating Officer Streets, Surface Transport j 160,403 12,090 - 573 173,066 41,770 96,566 - David Hendry, Finance Director, Surface Transport 151,139 20,000 - 1,542 172,681 41,272 150,641 - Philip Hufton, Chief Maintenance Officer, London Underground 232,891 35,000 - - 267,891 27,722 205,883 31,200 Ben Plowden, Director of Better Routes and Places, Surface Transport 174,522 35,100 - - 209,622 44,658 183,042 34,816 Peter Regan, Corporate Finance Director 154,469 71,153 - 573 226,195 40,273 154,258 47,600 Geoff Virrels, Commercial Adviser, London Underground k 130,886 - - 1,542 132,428 98,740 181,149 43,920 David Waboso, Director of Line Upgrades, London Underground 177,888 27,500 - 1,542 206,930 44,112 177,529 34,000

Notes g Performance-related pay of £27,000 sacrificed to pension fund in 2008/09 h Entered service 1 February 2010 i Entered service 15 February 2010 j Entered service 4 August 2008 as Director of Strategy and Policy, Planning Directorate, took up current post on 13 July 2009 k Formerly Chief Programme Officer, London Underground until 2 October 2009. His current role is two days a week. Performance-related pay of £27,500 (2008/09 nil) sacrificed to pension fund

Statement of Accounts 129 Notes to the Accounts (continued)

Total Salary Performance- remuneration Salary Performance- (including related pay Compensation excluding Employer's (including related pay fees and for 2008/09 for loss of Benefits pension contribution fees and for 2007/08 allowances paid in year employment in kind contributions to pension allowances) paid in year 2009/10 2009/10 2009/10 2009/10 2009/10 2009/10 2008/09 2008/09 Notes £ £ £ £ £ £ £ £

Crossrail current office holders/employees Terry Morgan, Non-Executive Chairman l 208,333 - - 1,265 209,598 - - - Rob Holden, Chief Executive m 553,000 - - 1,495 554,495 35,004 - - David Allen, Finance Director n 178,630 - - 1,495 180,125 30,685 14,322 - David Bennett, Implementation Director o 152,561 - - 641 153,202 22,823 - - Keith Berryman, Land and Property Director p 145,075 6,750 - - 151,825 26,482 90,000 - Neil Farmer, IT Director q 90,029 - - 920 90,949 18,903 - - Andy Mitchell, Programme Director r 164,266 - - 624 164,890 20,193 - - Chris Sexton, Technical Director s 41,250 - - - 41,250 7,572 - - Valerie Todd, Talent and Resources Director t 191,925 41,078 - 1,887 234,890 45,516 190,129 -

Former employees Malcolm Murray-Clark, Managing Director, Planning u 130,559 32,660 41,478 502 205,199 408,952 145,740 33,352 Doug Oakervee, Non-Executive Chairman, Crossrail v 41,667 - - - 41,667 - 337,444 54,000 Tim O'Toole, Managing Director, London Underground w 21,479 70,000 - - 91,479 5,521 320,567 150,000 Stephen Berrang, Capital Programme Director, London Underground x 100,750 8,000 - 13,506 122,256 18,510 199,302 9,983 Peter Brown, Chief Operating Officer, Surface Transport y 67,830 16,000 - 139 83,969 13,882 178,630 - Naomi Connell, Director, Finance and Support Offices, London Underground z 125,121 27,000 - 1,139 153,260 28,025 155,355 39,000 Philip Pavitt, Chief Information Officer aa 90,453 57,500 - 612 148,565 - 212,755 29,440 Jeroen Weimar, COO Enforcement and Compliance, Surface Transport bb 151,855 19,000 - 1,616 172,471 41,272 155,565 20,000

Notes l Entered service 1 June 2009 m Entered service 1 April 2009 n Entered service 2 March 2009 o Entered service 20 July 2009 p Entered service 1 October 2008. Part-time four days per week from 1 January 2010 q Entered service 24 August 2009 r Entered service 1 August 2009 s Entered service 4 January 2010 t Employed by TfL but on secondment to Crossrail since January 2008. Performance-related pay of £47,915 sacrificed to pension fund in 2008/09

130 Transport for London – Annual Report and Statement of Accounts 2009/10 Total Salary Performance- remuneration Salary Performance- (including related pay Compensation excluding Employer's (including related pay fees and for 2008/09 for loss of Benefits pension contribution fees and for 2007/08 allowances paid in year employment in kind contributions to pension allowances) paid in year 2009/10 2009/10 2009/10 2009/10 2009/10 2009/10 2008/09 2008/09 Notes £ £ £ £ £ £ £ £

Crossrail current office holders/employees Terry Morgan, Non-Executive Chairman l 208,333 - - 1,265 209,598 - - - Rob Holden, Chief Executive m 553,000 - - 1,495 554,495 35,004 - - David Allen, Finance Director n 178,630 - - 1,495 180,125 30,685 14,322 - David Bennett, Implementation Director o 152,561 - - 641 153,202 22,823 - - Keith Berryman, Land and Property Director p 145,075 6,750 - - 151,825 26,482 90,000 - Neil Farmer, IT Director q 90,029 - - 920 90,949 18,903 - - Andy Mitchell, Programme Director r 164,266 - - 624 164,890 20,193 - - Chris Sexton, Technical Director s 41,250 - - - 41,250 7,572 - - Valerie Todd, Talent and Resources Director t 191,925 41,078 - 1,887 234,890 45,516 190,129 -

Former employees Malcolm Murray-Clark, Managing Director, Planning u 130,559 32,660 41,478 502 205,199 408,952 145,740 33,352 Doug Oakervee, Non-Executive Chairman, Crossrail v 41,667 - - - 41,667 - 337,444 54,000 Tim O'Toole, Managing Director, London Underground w 21,479 70,000 - - 91,479 5,521 320,567 150,000 Stephen Berrang, Capital Programme Director, London Underground x 100,750 8,000 - 13,506 122,256 18,510 199,302 9,983 Peter Brown, Chief Operating Officer, Surface Transport y 67,830 16,000 - 139 83,969 13,882 178,630 - Naomi Connell, Director, Finance and Support Offices, London Underground z 125,121 27,000 - 1,139 153,260 28,025 155,355 39,000 Philip Pavitt, Chief Information Officer aa 90,453 57,500 - 612 148,565 - 212,755 29,440 Jeroen Weimar, COO Enforcement and Compliance, Surface Transport bb 151,855 19,000 - 1,616 172,471 41,272 155,565 20,000

Notes u Part-time job share, three days per week, left service 19 February 2010. Pension cost includes a one-off charge payable to the Local Government Pension Scheme relating to augmented pension v Executive Chairman of Crossrail until 31 March 2009. Appointed Non-Executive Chairman until 31 May 2009 w Left service 30 April 2009 x Left service 2 September 2009 y Left service 3 July 2009. Performance-related pay of £26,600 sacrificed to pension fund in 2008/09 z Left service 31 December 2009 aa Left service 28 August 2009 bb Left service 5 March 2010

Statement of Accounts 131 Notes to the Accounts (continued)

6 Exceptional items

Group Group Corporation Corporation 2009/10 2008/09 2009/10 2008/09 £m £m £m Release from finance lease creditor - (1,705.5) - - Write off of goodwill - 97.6 - - Provision against loan receivable from the Metronet Infracos - 104.7 - 104.7 Total exceptional items included in expenditure - (1,503.2) - 104.7

7 Transport grant Allocation of transport grant receivable:

Group Group Corporation Corporation 2009/10 2008/09 2009/10 2008/09 Note £m £m £m £m Grant from Department for Transport applied to fund revenue expenditure 1,081.8 1,231.4 1,081.8 1,231.4 Grant from Department for Transport taken to deferred grants 20 1,805.6 1,802.1 - 331.2 Grant from Department for Transport used to fund capital expenditure in subsidiaries - - 1,805.6 1,470.9 Total transport grant receivable 2,887.4 3,033.5 2,887.4 3,033.5

8 Loss on disposal or retirement of assets

Group Group Corporation Corporation 2009/10 2008/09 2009/10 2008/09 Note £m £m £m £m Net proceeds (104.8) (17.4) (57.1) (2.2) Capital grant released 20 (77.3) (307.4) - - (182.1) (324.8) (57.1) (2.2)

Less net book value 11a, b 196.6 410.6 61.4 7.4 Loss on disposal of assets 14.5 85.8 4.3 5.2

132 Transport for London – Annual Report and Statement of Accounts 2009/10 9 Net finance charges

The finance income recognised in the Income and Expenditure Account is made up as follows: Group Group Corporation Corporation 2009/10 2008/09 2009/10 2008/09 £m £m £m £m Interest income on bank deposits (13.9) (104.6) (13.2) (100.5) Interest income on loans to subsidiaries - - (97.8) (59.8) Interest receivable and investment income (13.9) (104.6) (111.0) (160.3)

The finance costs recognised in the Income and Expenditure Account are made up as follows:

Group Group Corporation Corporation 2009/10 2008/09 2009/10 2008/09 restated* restated* £m £m £m £m Interest on finance lease creditors 226.1 206.9 11.3 8.0 Interest expense on financial liabilities measured at amortised cost 164.3 115.2 164.3 115.1 Other 0.3 - - - Interest payable and similar charges 390.7 322.1 175.6 123.1

* See Statement of Accounting Policies (Note u) Accounting for PFI transactions and similar contracts.

Statement of Accounts 133 Notes to the Accounts (continued)

10 Taxation

The Corporation is exempt from corporation tax but the subsidiaries are assessable individually to taxation in accordance with the Income and Corporation Taxes Act 1988. No liability for corporation tax arises in respect of the current year.

Group Group 2009/10 2008/09 restated* (Deficit)/Surplus for the year before tax (1,204.6) 275.7 Corporation tax at 28% (2008/09 28%) (337.3) 77.2 Capital allowances for the year less than depreciation (26.6) 41.0 Adjustment for capital gains - 23.5 Non-taxable exceptional items - (450.3) Other timing differences 50.5 (50.0) Overseas earnings (0.8) (1.3) Permanent difference in TfL Corporation 118.1 145.6 Loss for the year carried forward 196.1 214.3 Current tax charge for the year - -

At 31 March 2010 the Group had a net deferred tax asset of £545.1m (2009 £616.8m) comprised of tax losses carried forward, accelerated capital allowances and short-term timing differences. No deferred tax asset is accounted for, as it is not believed that such an asset would be recoverable in the foreseeable future. The full potential liability for deferred taxation in respect of potential capital gains on revalued fixed assets has not been quantified as no tax liability is expected to arise due to the availability of rollover relief.

*See Statement of Accounting Policies (Note u) Accounting for PFI transactions and similar contracts.

134 Transport for London – Annual Report and Statement of Accounts 2009/10 11 Tangible fixed assets

a) Group

Infrastructure Non- and other Rolling Plant and operational property stock equipment assets Total Note £m £m £m £m £m Gross cost or valuation Balance at 1 April 2009 restated* 23,229.7 3,685.3 1,872.9 2,304.0 31,091.9 Additions to fixed assets 1,199.6 283.1 197.8 1,458.8 3,139.3 Disposals and retirements (202.4) (12.5) (108.7) (91.9) (415.5) Transfers and adjustments 732.3 (12.9) 164.9 (884.3) - Revaluation (42.1) - - 31.6 (10.5) Gross cost or valuation at 31 March 2010 24,917.1 3,943.0 2,126.9 2,818.2 33,805.2

Depreciation Balance at 1 April 2009 restated* 8,703.5 2,113.1 819.3 - 11,635.9 Disposals and retirements (108.5) (12.4) (98.0) - (218.9) Depreciation charge 11c 515.8 95.0 190.6 - 801.4 Revaluation (42.2) (0.1) - - (42.3) Balance at 31 March 2010 9,068.6 2,195.6 911.9 - 12,176.1

Net book value at 31 March 2010 15,848.5 1,747.4 1,215.0 2,818.2 21,629.1 Net book value at 31 March 2009 restated* 14,526.2 1,572.2 1,053.6 2,304.0 19,456.0

*See Statement of Accounting Policies (Note u) Accounting for PFI transactions and similar contracts.

Statement of Accounts 135 Notes to the Accounts (continued)

PPP assets and PFI and other leased assets The net book value above includes the following amounts in respect of PFI and other leased assets and assets allocated to PPP contractors: Infrastructure Rolling Plant and Non- Total and other stock equipment operational property assets £m £m £m £m £m Gross cost PPP assets 7,717.8 974.3 239.4 48.4 8,979.9 PFI and other leased assets 653.4 96.2 734.7 - 1,484.3 8,371.2 1,070.5 974.1 48.4 10,464.2

Depreciation PPP assets 2,345.5 536.7 165.1 - 3,047.3 PFI and other leased assets 119.5 25.5 121.0 - 266.0 2,465.0 562.2 286.1 - 3,313.3

Net book value at 31 March 2010 5,906.2 508.3 688.0 48.4 7,150.9 Net book value at 31 March 2009 restated* 5,734.2 498.2 840.5 35.8 7,108.7

* See Statement of Accounting Policies (Note u) Accounting for PFI transactions and similar contracts.

136 Transport for London – Annual Report and Statement of Accounts 2009/10 b) Corporation

Infrastructure Plant and Non- Total and other equipment operational property assets Note £m £m £m £m Gross cost or valuation Balance at 1 April 2009 restated* 4,459.8 344.0 265.7 5,069.5 Additions to fixed assets 46.6 36.6 578.4 661.6 Disposals and retirements (15.1) (46.6) (57.5) (119.2) Transfers and adjustments 64.0 82.7 (146.7) - Revaluation 1.1 - 0.2 1.3

Gross cost or valuation at 31 March 2010 4,556.4 416.7 640.1 5,613.2

Depreciation Balance at 1 April 2009 restated* 2,002.2 200.9 - 2,203.1 Disposals and retirements (11.2) (46.6) - (57.8) Depreciation charge 11c 132.3 50.7 - 183.0 Revaluation (0.3) - - (0.3) Balance at 31 March 2010 2,123.0 205.0 - 2,328.0

Net book value at 31 March 2010 2,433.4 211.7 640.1 3,285.2 Net book value at 31 March 2009 restated* 2,457.6 143.1 265.7 2,866.4

* See Statement of Accounting Policies (Note u) Accounting for PFI transactions and similar contracts

Statement of Accounts 137 Notes to the Accounts (continued)

c) Depreciation charge

Group Group Corporation Corporation 2009/10 2008/09 2009/10 2008/09 restated* restated* Note £m £m £m £m Depreciation for the period: - on the historical cost of depreciated fixed assets 418.5 398.0 173.6 169.3 - on the revalued element of depreciated fixed assets 86.6 72.7 - - - on assets allocated to PPP contractors 193.1 183.3 - - on assets held under PFIs and finance leases 103.2 53.5 9.4 9.4

Total depreciation charge 11a, b 801.4 707.5 183.0 178.7 Less release of deferred grants 20 (398.6) (379.2) (40.0) (42.2) Depreciation net of release of deferred grants 402.8 328.3 143.0 136.5

*See Statement of Accounting Policies (Note u) Accounting for PFI transactions and similar contracts.

d) Historical cost of assets

The historical cost of assets is the original cost to the subsidiary that acquired the assets, together with the fair value of the assets transferred to the Corporation on 3 July 2000 and the cost of subsequent additions.

Group Group Corporation Corporation 2010 2009 2010 2009 restated* restated* £m £m £m £m Infrastructure and other property 20,535.9 18,755.0 4,555.3 4,459.5 Rolling stock 2,795.0 2,498.7 - - Plant and equipment 2,029.4 1,792.9 416.7 344.0 Non-operational assets 2,624.1 2,074.9 624.8 211.6 Gross cost 27,984.4 25,121.5 5,596.8 5,015.1 Less accumulated depreciation (7,273.3) (6,677.7) (2,330.5) (2,205.7) Net written down cost 20,711.1 18,443.8 3,266.3 2,809.4

*See Statement of Accounting Policies (Note u) Accounting for PFI transactions and similar contracts.

138 Transport for London – Annual Report and Statement of Accounts 2009/10 e) Group assets

Group Group 2010 2009 Number Number Railway carriages 4,243 4,204 Track route length (kilometres) 458 458 Railway stations 289 289 Bridges and viaducts 2,062 2,061 Roads (kilometres) 582 582 Car ferries 3 3 Buses 391 552 Bus garages, stations and stands 361 357 Bus shelters 9,741 9,643 Offices 161 172 Piers 9 9

f) Capital expenditure analysed by source of finance

Corporation Corporation 2010 2009 Note £m £m Analysis by source of finance: Transport capital grants - 183.1 Prudential borrowing used to fund fixed assets 277.6 - Third party contributions 20 14.0 17.4 Capital receipts 57.1 2.4 Working capital 312.9 -

11b 661.6 202.9

Statement of Accounts 139 Notes to the Accounts (continued)

12 Subsidiaries

Group Group Corporation Corporation 2010 2009 2010 2009 £m £m £m £m Investment in subsidiaries at 31 March - - 22.5 22.5

The Group’s subsidiaries are:

Subsidiaries Principal activity Transport Trading Limited Holding company London Underground Limited Passenger transport by underground train London Bus Services Limited Passenger transport by bus Docklands Light Railway Limited Passenger transport by rail Rail for London Limited Passenger transport by rail Victoria Coach Station Limited Coach station London River Services Limited Pier operator London Buses Limited Dial-a-Ride London Transport Insurance (Guernsey) Limited Insurance LUL Nominee BCV Limited Maintenance of underground lines LUL Nominee SSL Limited Maintenance of underground lines Crossrail Limited Construction of Crossrail infrastructure London Transport Museum Limited Charitable company London Transport Museum (Trading) Limited Museum shop Tramtrack Croydon Limited Passenger transport by tram Tramtrack Leasing Limited Passenger transport by tram – lease rental company Tramtrack Lease Financing Limited Passenger transport by tram – lease finance company

The Group holds 100 per cent of the share capital of all subsidiaries. The accounts of these companies are lodged at Companies House and also at the Charity Commission for the London Transport Museum Limited.

140 Transport for London – Annual Report and Statement of Accounts 2009/10 13 Stocks

Group Group Corporation Corporation 2010 2009 2010 2009 £m £m £m £m Maintenance stores 17.6 19.2 2.3 2.7 Goods purchased for resale 0.7 1.0 - - 18.3 20.2 2.3 2.7

14 Debtors Group Group Corporation Corporation 2010 2009 2010 2009 Note £m £m £m £m Amount falling due after one year Amounts due from subsidiaries – loans - - 3,083.5 2,184.9 Amount falling due within one year Trade debtors 470.8 294.3 254.4 73.5 Other debtors 53.9 82.3 53.9 82.3 Prepayments and accrued income 173.9 111.8 60.4 51.1 21 698.6 488.4 368.7 206.9

TfL formalised its loan agreements with its subsidiary companies during 2007/08. With effect from 1 April 2007, all outstanding loans became interest bearing. They also became repayable on demand after a two-year notice period. Therefore, they have been classified as long-term debtors.

15 Short-term investments

Group Group Corporation Corporation 2010 2009 2010 2009 Note £m £m £m £m Short-term investments 21 1,472.5 1,967.8 1,427.8 1,925.8

Short-term investments include amounts placed on deposit with HM Treasury Debt Management Office of £1,229.6m (2009: £1,256.4m) and with banks and financial institutions of £242.9m (2009: £711.4m). Refer to Note 21 for the Group’s credit risk management policies.

Statement of Accounts 141 Notes to the Accounts (continued)

16 Cash at bank and in hand Group Group Corporation Corporation 2010 2009 2010 2009 Note £m £m £m £m Cash at bank 12.2 13.4 6.8 11.0 Cash in hand and in transit 24.7 20.7 0.2 0.2 21 36.9 34.1 7.0 11.2

17 Creditors

Group Group Corporation Corporation 2010 2009 2010 2009 restated* restated* Note £m £m £m £m a) Amounts falling due within one year Trade creditors 853.1 996.0 239.4 256.2 Capital works 594.0 479.0 56.2 80.7 Amounts due to subsidiary companies - - 98.3 126.7 Finance lease obligations repayable within one year 21 389.0 368.7 6.8 5.7 Salaries and wages 43.0 44.1 9.9 7.7 Receipts in advance for , bus passes and Oyster cards 188.0 191.4 - - 2,067.1 2,079.2 410.6 477.0

b) Amounts falling due after more than one year Retentions on capital contracts 1.3 0.8 1.3 0.8 Accruals and deferred income 29.9 30.0 9.0 9.5 Finance lease obligations 21 2,550.0 2,488.7 202.4 209.1 2,581.2 2,519.5 212.7 219.4 * See Statement of Accounting Policies (Note u) Accounting for PFI transactions and similar contracts.

142 Transport for London – Annual Report and Statement of Accounts 2009/10 18 Provisions for liabilities and charges

At 1 April Payments in Increase/ At 31 March 2009 year (decrease) in 2010 provision Note £m £m £m £m Group Claims for compensation 112.8 (9.9) (7.4) 95.5 Capital investment activities 5.3 (0.1) 419.9 425.1 Unfunded pension liabilities 22f 40.6 (4.2) 15.5 51.9 Other 35.1 (16.0) 25.6 44.7 193.8 (30.2) 453.6 617.2

Corporation Claims for compensation 43.3 (4.9) (24.2) 14.2 Capital investment activities 5.1 - 420.0 425.1 Unfunded pension liabilities 24.1 (3.0) 7.5 28.6 Other 5.3 (7.9) 9.9 7.3 77.8 (15.8) 413.2 475.2

* See Statement of Accounting Policies (Note u) Accounting for PFI transactions and similar contracts.

Claims for compensation include provisions in respect of disputes in the ordinary course of business relating to projects and contracts for which the outcome is uncertain. While a claim is ongoing TfL is unable to disclose the quantum or timing of any possible settlement as this could prejudice its commercial position.

Capital investment activities includes compulsory purchases, claims in respect of structural damage or diminution in value of properties affected by transport schemes, and other related third party claims.

Details of unfunded pension liabilities are given in Note 22f.

Statement of Accounts 143 Notes to the Accounts (continued)

19 Borrowings The carrying value of debt is as follows:

Group Group Corporation Corporation 2010 2009 2010 2009 Note £m £m £m £m Borrowings 21 4,117.8 3,017.6 4,117.8 3,017.6

The increase in borrowings reflects the drawdowns on the EIB facilities for the East London line, Crossrail and Docklands Light Railway of £416m and net proceeds from Public Works Loan Board borrowings of £684m.

20 Deferred grants Group Group Corporation Corporation 2010 2009 2010 2009 Note £m £m £m £m Balance at 1 April 8,216.2 6,864.2 724.0 417.6 Transport grant 7 1,805.6 1,802.1 - 331.2 Third party contributions and other grant funding 11f 164.6 236.5 14.0 17.4 Release of deferred grant: - to meet the depreciation charge 11c (398.6) (379.2) (40.0) (42.2) - on disposal of tangible fixed assets 8 (77.3) (307.4) - - Balance at 31 March 9,710.5 8,216.2 698.0 724.0

144 Transport for London – Annual Report and Statement of Accounts 2009/10 21 Nature and extent of risks arising from financial instruments Fair value of assets and liabilities carried at amortised cost

Financial liabilities and financial assets represented by loans and receivables are carried in the balance sheet at amortised cost.

The fair values of all financial liabilities compared to carrying amounts are as follows:

Group Group Group Group 2010 2010 2009 2009 Carrying Fair value Carrying Fair value amount amount restated* restated* Note £m £m £m £m Trade and other payables 1,709.3 1,709.3 1,741.3 1,741.3 Finance lease obligations 17 2,939.0 2,939.0 2,857.4 2,857.4 Borrowings 19 4,117.8 4,079.0 3,017.6 3,118.3 Financial liabilities 8,766.1 8,727.3 7,616.3 7,717.0

*See Statement of Accounting Policies (Note u) Accounting for PFI transactions and similar contracts.

At 31 March 2010, the average mid-market value of the group’s quoted debt was £553.5m (2009 £566.8m). All other financial liabilities have fair values equal to their book value. Loans bear a market rate of interest at the time the borrowings were made.

The fair values of all financial assets compared to carrying amounts are as follows:

Group Group Group Group 2010 2010 2009 2009 Carrying Fair value Carrying Fair value amount amount Note £m £m £m £m Trade and other receivables 14 698.6 698.6 488.4 488.4 Cash and cash equivalents: Deposits less than 3 months 15 1,472.5 1,472.5 1,967.8 1,967.8 Cash at bank and in hand 16 36.9 36.9 34.1 34.1 Financial assets 2,208.0 2,208.0 2,490.3 2,490.3

All financial assets have fair values equal to their book value.

Governance TfL has taken account of the CIPFA recommendations contained in the Code of Practice and Cross-Sectoral Guidance Notes (Fully Revised Second Edition) (the Treasury Management Code) issued in 2009 for Treasury Management in the Public Services, the Local Government Act 2003, the Capital Finance and Accounts Regulations 2003 and the fully revised second edition of CIPFA’s Prudential Code for Capital Finance in Local Authorities (the Prudential Code) issued in 2009, in managing the financial risks faced by the Group.

TfL specifically considers the short and long-term funding requirements of its operations, its capital investment programmes and liquidity required to discharge its financial obligations when they fall due. It also considers

Statement of Accounts 145 Notes to the Accounts (continued)

its exposure to inflation and interest rates as they affect its commercial and financial activities. The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the resources available to fund services and capital investment.

Treasury management TfL has a Treasury Management Policy, which requires TfL, prior to the commencement of each financial year, to approve a Treasury Management Strategy. On a daily basis, TfL Group Treasury monitors the risk profile of its investments and interest earned against approved benchmarks. A quarterly report on overall performance against approved strategy is considered by the Finance and Policy Committee (a sub-committee of the TfL Board).

In managing financial assets and liabilities, the annual Treasury Management Strategy for 2009/10 had the following objectives:

>> To undertake treasury management operations with primary regard for the security and liquidity of capital invested with reference to the guidance issued by the Office of the Deputy Prime Minister (ODPM Guidance) in March 2004 >> To maximise yield from investments consistent with security and liquidity objectives >> To ensure that sufficient cash is available to enable the TfL Group to discharge its financial obligations when they become due, in accordance with approved spending plans >> To undertake treasury management activity having regard to Prudential Code Indicators Borrowing limits In accordance with the Local Government Act 2003, the Mayor sets an affordable borrowing limit. By regulation, the Mayor and the Corporation are required to have regard to the Prudential Code. Accordingly, TfL annually approves indicators for prudent and affordable borrowing, for estimates of capital expenditure and for interest rate exposures and the maturity profiles of borrowing.

The Group’s main financial assets and liabilities are its cash and investments, its borrowings and its obligations under finance leases (mainly the Tube Lines PPP arrangement). These financial assets and liabilities are taken into account when considering the prudence and affordability of the long term funding plan necessary to support the Group’s operations and capital investment programmes.

Financial risks The Group faces a number of financial risks. The key ones are:

>> Credit risk >> Liquidity risk >> Market risk Credit risk Credit risk is managed on a Group-wide basis. Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet contractual obligations, and arises from deposits with banks and financial institutions and from the Group’s customers and suppliers. The following categories comprise the maximum credit exposure of the Group.

Trade and other receivables The majority of the Group’s trade debtors are individuals who owe amounts relating to the use of transport infrastructure. The Group earns the majority of revenue through prepaid fares, and the receivables relate to penalty charges. The Group makes all reasonable attempts to recover penalty charges before providing against them.

146 Transport for London – Annual Report and Statement of Accounts 2009/10 Other receivables include amounts due under contractual arrangements with suppliers, and include prepayments for work to be performed. These counterparties are assessed individually for their creditworthiness at the time of entering into contract and termination provisions are included to mitigate the Group’s risk.

Investments All cash balances are invested in accordance with the Treasury Management Code and with regard to the ODPM Guidance, which requires a prudent approach to the investment of surplus funds with priority given to security and liquidity. TfL maintains the investment policy of short-term, high-security specified investments, which must satisfy the conditions set out below:

>> The investment is denominated in Sterling and any payments or repayments in respect of the investment are payable in Sterling only >> The investment is not a long-term investment (i.e. has a maturity of less than one year) >> The investment does not involve the acquisition of share or loan capital in any body corporate >> The investment is either: -- made with the UK Government or -- made with a body or in an investment scheme which has been awarded a high (investment grade) credit rating by a credit rating agency Non-UK Government investments are made only with banks and financial institutions if placed on TfL’s Approved Investment List. In determining whether to place an institution on the Approved Investment List, for 2009/10 the Investment Group made up of senior TfL staff considered the financial position and jurisdiction of the institution, the market pricing of credit default swaps for the institution, any implicit or explicit Government support for the institution and any other relevant factors that could influence the institution’s general creditworthiness.

Deposit limits per institution on the Approved Investment List, and the maximum term of deposits, are linked to a minimum credit rating of the institution (in the range of A+ to AAA) from at least two credit rating agencies (at the time of making the deposit).

In addition, there is a country exposure limit of £200m, so that at any one time the aggregate of all investments in entities in a single country or jurisdiction does not exceed this limit. This applies for all countries except the UK. Following the global credit crisis, new investments were placed only with HM Government’s Debt Management Office and the four main UK clearing banks.

Guarantees The Corporation provides guarantees to third parties under Section 160 of the Greater London Authority Act 1999, which are deemed necessary for the fulfilment of its policies. The Group’s policy is to recognise guarantees at fair value initially and amortise this over the life of the guarantee. Where indications are that a payment is likely to occur under a guarantee, this is accounted for as a provision, in accordance with the SORP. Further detail is given in Note 29.

Statement of Accounts 147 Notes to the Accounts (continued)

Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.

As long as the affordable borrowing limit set by the Mayor is not exceeded, the Corporation is able to borrow from the Public Works Loan Board, raise debt on the capital markets through its established Medium Term Note programme and subject to meeting the relevant criteria, borrow at competitive interest rates from the European Investment Bank. There is therefore no significant risk that it will be unable to raise finance to meet its planned capital commitments.

Further protection is provided to the Corporation by

>> Borrowing only for capital expenditure incurred in the medium-term (three years) and for periods that equate broadly to the lives of the assets being acquired >> Fixing interest at historically low long-term rates and >> Making provision in its financial plans to ensure that sufficient resources are retained to repay borrowings at maturity. Revenue expenditure is funded by cash fares from customers, cash-backed reserves and cash-backed grant from Government, agreed up to 2017/18. As revenue budgets are required by law to be balanced each year, there is no significant liquidity risk attached to revenue expenditure The following represents the maturity analysis of the principal amounts for each source of borrowing for the Corporation as at 31 March 2010:

EIB Bonds PWLB Total £m £m £m £m Within five years - - - - Between five and ten years 120.0 - 29.3 149.3 Between ten and fifteen years 233.3 - 307.5 540.8 Between fifteen and twenty years 233.3 120.0 145.2 498.5 Between twenty and twenty-five years 63.4 340.0 321.2 724.6 Between twenty-five and thirty years 150.0 40.0 552.6 742.6 Between thirty and thirty-five years - 100.0 364.6 464.6 Between thirty-five and forty years - - 400.0 400.0 Between forty and forty-five years - - 395.1 395.1 Between forty-five and fifty years - - 210.0 210.0 Total principal repayable 800.0 600.0 2,725.5 4,125.5 Drawn down at 31 March 2010 800.0 600.0 2,725.5 4,125.5 Drawn down at 31 March 2009 384.2 600.0 2,040.9 3,025.1

148 Transport for London – Annual Report and Statement of Accounts 2009/10 The maturity analysis of PFI and other finance lease creditors for the group is as follows:

Group Group 2010 2009 restated* £m £m Within one year 389.0 368.7 Between one and five years 1,750.6 1,673.0 Between five and ten years 336.7 320.5 Over ten years 462.7 495.2 Total finance lease creditor payable 2,939.0 2,857.4

* See Statement of Accounting Policies (Note u) Accounting for PFI transactions and similar contracts.

Market risk Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Group’s income or the value of its holdings of financial instruments.

Interest rate risk The Corporation has to date borrowed at fixed rates of interest. While this protects the Group from adverse increases in interest rates, in a low interest rate environment these rates could potentially be higher than equivalent floating rates.

Because interest rates are currently fixed at historically low levels, the Corporation is not exposed to upward interest rate movements on its current borrowings.

TfL Group Treasury invested surplus cash in short term instruments, typically with terms ranging from overnight to 45 days. As described in this Note (see Credit risk), the Corporation has adopted a very cautious investment strategy for new investments.

Foreign exchange risk The Group has no financial assets or liabilities denominated in foreign currencies and thus has no translation exposure to gains or losses arising from movements in exchange rates. For 2009/10, the policy on managing transactional foreign exchange risk related to contractual obligations with overseas providers was to pass the exchange risk to the vendor.

Statement of Accounts 149 Notes to the Accounts (continued)

22 Pensions

a) Summary of pension totals for the year

Total pension service cost for the year Group Group Corporation Corporation 2009/10 2008/09 2009/10 2008/09 Note £m £m £m £m TfL Pension Fund 127.4 158.8 33.1 31.4 Local Government Pension Scheme 3.9 2.6 3.9 2.6 Principal Civil Service Pension Scheme 0.9 1.2 0.9 1.2 Unfunded schemes provision 3.1 0.9 1.2 0.6 Other schemes 5.5 4.1 0.7 0.7

Amount included in net cost of services 3 140.8 167.6 39.8 36.5

The service cost for the Corporation for the TfL Pension Fund represents the employer’s contributions payable.

Total pensions interest cost and expected return on pensions’ assets Group Group Corporation Corporation 2009/10 2008/09 2009/10 2008/09 Note £m £m £m £m TfL Pension Fund 95.8 38.3 - - Local Government Pension Scheme 1.4 0.6 1.4 0.6 Unfunded Schemes Provision 1.5 2.8 1.5 1.7

Amount included in net operating expenditure 22b 98.7 41.7 2.9 2.3

Total pension deficit at end of year Group Group Corporation Corporation 2009/10 2008/09 2009/10 2008/09 Note £m £m £m £m TfL Pension Fund (2,095.7) (1,130.2) - - Local Government Pension Scheme (46.9) (17.3) (46.9) (17.3) (2,142.6) (1,147.5) (46.9) (17.3) Unfunded Schemes Provision 18, 22f (51.9) (40.6) (28.6) (24.1) Deficit recognised as a liability in the balance sheet 22b (2,194.5) (1,188.1) (75.5) (41.4)

The majority of the Group's staff are members of the TfL Pension Fund. The majority of the Group’s remaining staff belong to the Local Government Pension Scheme or the Principal Civil Service Pension Scheme.

150 Transport for London – Annual Report and Statement of Accounts 2009/10 b) TfL Pension Schemes This section deals with those pension funds to which the Group contributions are accounted for under FRS 17 as defined benefit schemes.

TfL Pension Fund The TfL Pension Fund, to which the Group contributes, is a final salary scheme established under trust. The Fund’s Trustee is the TfL Trustee Company Limited, a wholly owned subsidiary of TfL. Under the rules of the Fund, its 18 Trustee Directors are nominated in equal numbers by TfL and on behalf of the Fund's membership.

Every three years, the TfL Pension Fund’s actuary makes valuations and recommends the level of contributions to be made by the participating employers to ensure the long-term solvency of the Fund. The latest valuation of the Fund was carried out as at 31 March 2009 by the Actuary, a partner of consulting actuaries, Tower Watson (formerly Watson Wyatt), using the projected unit method.

A revised Schedule of Contributions was agreed between the Trustee and the employers following the formal funding valuation of the TfL Pension Fund.

For the Public Sector Section, employers’ contributions for the period 1 September 2007 to 31 March 2010 were 31.0 per cent, and contributions from 1 April 2010 until 31 March 2020 will continue to be 31.0 per cent with additional lump sum payments due in 2018, 2019 and 2020. The recovery plan states that the expectation is that the funding shortfall will be eliminated by 31 March 2020.

The Corporation and the Group both account for pension costs in accordance with FRS 17. The underlying assets and liabilities of the Public Sector Section cover a number of Group entities and cannot be readily split between each undertaking on a consistent and reliable basis. Thus, in accordance with the standard, the Corporation treats contributions to the Public Sector Section as if they were contributions to a defined contribution plan. The pension cost recognised in the Corporation's accounts for the Public Sector Section is the amount of contributions payable to the scheme during the year. The BCV and SSL Sections transferred to the Public Sector Section on 30 March 2010. As these sections only cover individuals employed by London Underground, they were accounted for as defined benefit schemes in the accounts of London Underground and in the Group accounts.

A valuation of the TfL Pension Fund has been prepared for accounting purposes on an FRS 17 basis as at 31 March 2010. The assumptions used by the actuary are the best estimates chosen from a range of possible actuarial assumptions, whilst the present value of the scheme’s liabilities is derived from cash flow projections. Due to the timescale covered, neither the assumptions nor the cash flow projections may necessarily be borne out in practice.

The liabilities for the TfL Pension Fund have been calculated using the mortality assumptions adopted for the latest funding valuation as at 31 March 2009. Standard mortality tables were used, adjusted to reflect the recent mortality experience of the Fund's pensioners at that date. An allowance was made for future mortality improvements in line with the medium cohort projections.

Local Government Pension Scheme The Local Government Pension Scheme is a funded multi-employer defined benefit scheme. The Corporation is able to identify its share of the assets and liabilities of the scheme and this scheme has therefore been accounted for as a defined benefit scheme under FRS 17. Employer’s contributions were payable at the rate of 15.8 per cent (2008/09 15.8 per cent) of pensionable pay. The Corporation's share of the underlying assets and liabilities resulted in a deficit of £46.9m (2008/09 £17.3m). A full actuarial valuation was carried out at 31 March 2007 with the next one due as at 31 March 2010. The annual report and accounts for the whole scheme can be found on the London Pensions Fund Authority website (www.lpfa.org.uk).

Statement of Accounts 151 Notes to the Accounts (continued)

The main actuarial assumptions used for the TfL Pension Fund and the Local Government Pension Scheme (together ‘the Schemes’) and unfunded schemes were:

FRS 17 FRS 17 FRS 17 valuation at valuation at valuation at 31 March 31 March 31 March 2010 2009 2008 % % % Inflation 3.8 – 3.9 2.2 – 3.1 3.6 Rate of increase in salaries 4.5 – 5.4 2.95 – 4.6 5.1 Rate of increase of pensions in payment and deferred pensions 3.8 – 3.9 2.9 – 3.1 3.6 Discount rate 5.5 6.9 6.8 – 6.9 Investment return 6.8 – 7.4 6.3 – 6.4 6.8 – 7.0

The assets in the Schemes and the expected rate of return were:

Value at Value at Value at Expected 31 March Expected 31 March Expected 31 March return 2010 return 2009 return 2008 % £m % £m % £m Equities 8.0 3,136.0 7.9 2,191.6 8.2 2,332.3 Bonds 5.0 1,658.0 4.2 1,270.1 4.9 1,614.1 Cash, property and other assets 4.2 120.4 3.7 295.5 5.3 178.3 Total fair value of assets 4,914.4 3,757.2 4,124.7 Actuarial valuation of liabilities (7,108.9) (4,945.3) (4,774.3) Deficit in the Schemes recognised as a liability in the balance sheet (2,194.5) (1,188.1) (649.6)

The TfL and the Local Government Pension Schemes’ assets consist of the following categories, by proportion of the total assets held. The unfunded pension schemes have no assets to cover their liabilities. 31 March 31 March 31 March 2010 2009 2008 % % % Equities 64 58 57 Bonds 34 34 39 Cash, property and other assets 2 8 4 100 100 100

152 Transport for London – Annual Report and Statement of Accounts 2009/10 Income and Expenditure Account

Group Group Corporation Corporation 2009/10 2008/09 2009/10 2008/09 £m £m £m £m Analysis of amounts charged to net cost of services Current service cost 131.4 158.3 2.1 1.7 Past service cost 0.4 3.7 0.4 1.2 Curtailment and settlements 2.6 0.2 2.6 0.2 Total charged to net costs of services 134.4 162.2 5.1 3.1

Analysis of pensions interest cost and expected return on assets Interest on Schemes’ liabilities 339.8 348.7 5.2 5.6 Expected return on Schemes’ assets (241.1) (307.0) (2.3) (3.3) Total charged to net operating expenditure 98.7 41.7 2.9 2.3 Total amount included in operating expenditure in Income and Expenditure Account 233.1 203.9 8.0 5.4 Contribution to pension reserve (103.0) 10.0 1.6 (1.5) Amount to be met from government grant 130.1 213.9 9.6 3.9

Group Group Corporation Corporation 2009/10 2008/09 2009/10 2008/09 £m £m £m £m Analysis of amounts recognised in the Statement of Total Recognised Gains and Losses (STRGL) Actuarial loss recognised in STRGL during the year 1,001.9 530.5 31.2 5.7 Cumulative loss recognised in STRGL at end of the year 1,803.7 801.8 48.1 16.9

Statement of Accounts 153 Notes to the Accounts (continued)

Group Group Corporation Corporation 2009/10 2008/09 2009/10 2008/09 £m £m £m £m Analysis of scheme liabilities into amounts arising from schemes that are wholly or partly funded and wholly unfunded Wholly unfunded schemes 51.9 40.6 28.6 24.1 Wholly or partly funded schemes 7,057.0 4,904.7 91.6 55.5 Total scheme liabilities 7,108.9 4,945.3 120.2 79.6

Reconciliation of present value of the scheme liabilities:

Group Group Corporation Corporation 2009/10 2008/09 2009/10 2008/09 £m £m £m £m Change in liabilities Actuarial value of liabilities at start of year 4,945.3 4,774.3 79.6 81.4 Liabilities acquired in the year - 446.2 - - Current service cost 131.4 158.3 2.1 1.7 Interest cost 339.8 348.7 5.2 5.6 Employee contributions 39.3 36.2 0.8 0.9 Actuarial (gain)/loss on liabilities 1,854.2 (631.5) 39.7 (7.6) Actual benefit payments (201.9) (190.8) (8.0) (3.8) Past service cost 0.4 3.7 0.4 1.2 Settlements and curtailments 0.4 0.2 0.4 0.2 Actuarial value of liabilities at end of year 7,108.9 4,945.3 120.2 79.6

154 Transport for London – Annual Report and Statement of Accounts 2009/10 Reconciliation of fair value of the scheme assets:

Group Group Corporation Corporation 2009/10 2008/09 2009/10 2008/09 £m £m £m £m Change in assets Fair value of assets at start of year 3,757.2 4,124.7 38.2 45.7 Assets acquired in the year - 382.8 - - Expected return on assets net of expenses 241.1 307.0 2.3 3.3 Gain/(loss) on assets 852.3 (1,162.0) 8.5 (13.3) Actual employer contributions 227.0 259.3 2.1 5.4 Employee contributions 39.3 36.2 0.8 0.9 Actual benefits paid (200.3) (190.8) (5.0) (3.8) Settlements and curtailments (2.2) - (2.2) - Fair value of assets at end of year 4,914.4 3,757.2 44.7 38.2

c) Principal Civil Service Pension Scheme The Principal Civil Service Pension Scheme (PCSPS) is an unfunded multi-employer defined benefit scheme. The Group is unable to identify its share of the underlying assets and liabilities on a consistent and reasonable basis and, as permitted by the multi-employer exemption in FRS 17, the Group treats contributions to the PCSPS as if they were contributions to a defined contribution plan. A full actuarial valuation was carried out at 31 March 2007, and the next valuation is due as at 31 March 2010. Details can be found in the Civil Service Superannuation Resource Accounts (www.civilservice-pensions.gov.uk).

Employers' contributions were payable to the PCSPS at one of four rates in the range 17.1 per cent to 25.5 per cent of pensionable pay, based on salary bands. Rates will change as of 1 April 2010, subject to salary band changes. Employer contributions are reviewed every four years following a full scheme valuation by the Government Actuary. The contribution rates reflect benefits as they are accrued, not when the costs are actually incurred, and reflect past experience of the scheme. d) Railways Pension Scheme Crossrail Limited (CRL) contributes to the Omnibus Section of the Railways Pension Scheme (RPS). The RPS is a defined benefit arrangement for rail industry employees. The Omnibus Section is made up of 53 participating employers, each (apart from CRL) having fewer than 51 active members in the scheme.

The Omnibus Section of the RPS is a multi-employer scheme and is valued as a whole and as a result of this, CRL is unable to identify its share of the underlying assets and liabilities. It is therefore accounted for as a defined contribution scheme under FRS 17.

An actuarial valuation was carried out on the Omnibus Section of the scheme at 31 December 2007. The actuarial report showed that there was a surplus between the assets and liabilities of £6.236m for the total Omnibus Section.

The current level of total contribution is 31 per cent. The Trustee believes that it would not be prudent to use the surplus disclosed by the valuation to reduce contributions to less than the future service joint contribution rate.

Statement of Accounts 155 Notes to the Accounts (continued)

e) Analysis of movements in pensions reserve The actuarial gains and losses identified as movements on the pensions reserve can be analysed into the following categories, measured as absolute amounts and as a percentage of assets or liabilities at 31 March:

Group only The Schemes 2009/10 2008/09 2007/08 2006/07 2005/06 Difference between the expected and actual return on assets gain/ (loss) Amount (£ million) 852.3 (1,162.0) (321.9) 72.3 473.7 Percentage of scheme assets 17.3% 30.9% 7.8% 1.7% 12.5% Differences between actuarial assumptions about liabilities and actual experience gain/(loss) Amount (£ million) 380.0 (71.7) (156.2) (179.7) 59.8 Percentage of the present value of the scheme liabilities 5.3% 1.4% 3.3% 3.5% 1.3% Changes in the demographic and financial assumptions used to estimate liabilities gain/(loss) Amount (£ million) (2,234.2) 703.2 789.4 (97.9) (354.8) Percentage of the present value of the scheme liabilities 31.4% 14.2% 16.5% 1.9% 7.8%

Surplus / (deficit) at year end Fair value of assets at year end 4,914.4 3,757.2 4,124.7 4,137.9 3,794.3 Actuarial value of liabilities at year end (7,108.9) (4,945.3) (4,774.3) (5,127.9) (4,564.1) Deficit in schemes at year end (2,194.5) (1,188.1) (649.6) (990.0) (769.8) f) Unfunded pension costs The Group bears the cost of the augmentation of the pensions of certain employees, who retire early under voluntary severance arrangements.

In addition, the Group bears the cost of

>> Ex-gratia payments that are made to certain former employees on retirement in respect of service prior to the establishment of pension funds for those employees >> Supplementary pensions, which are made to certain former employees who retired prior to index linking of pensions >> Pensions of London Regional Transport (LRT) former board members who did not qualify to join the TfL Pension Fund

156 Transport for London – Annual Report and Statement of Accounts 2009/10 Punter Southall, consulting actuaries, were instructed to report on the financial position of the unfunded pension liabilities as at 31 March 2010 for the purpose of FRS17 only. The report does not constitute a formal actuarial valuation of the unfunded pension liabilities. The valuation as at 31 March 2010 was £51.9m (2009 £40.6m) and is fully provided for in these accounts.

23 Movements in reserves This statement shows the movements on the Group and Corporation’s reserves. It distinguishes between movements resulting from the gains and losses for the year and movements resulting from transfers between reserves, most of which the Corporation is required to make in accordance with statute or non-statutory proper practice. Balance at Gains/ Transfers Balance at 1 April 2009 (losses) for Between 31 March restated* the year reserves 2010 Group £m £m £m £m General fund* 166.3 (421.9) 409.4 153.8 Earmarked reserves 1,141.7 - (263.7) 878.0 Capital adjustment account* 1,369.0 - (107.5) 1,261.5 Fixed asset revaluation reserve 1,654.5 32.8 (126.4) 1,560.9 Group profit and loss reserve* 944.4 (782.7) 191.2 352.9 Capital reserves in subsidiaries 5.8 - - 5.8 Group pensions reserve (1,037.7) (1,001.9) (103.0) (2,142.6) Merger reserve 466.1 - - 466.1 Other reserves 82.6 - - 82.6 4,792.7 (2,173.7) - 2,619.0

Balance at Gains/ Transfers Balance at I April 2009 (losses) for Between 31 March restated* the year reserves 2010 Corporation £m £m £m £m General fund* 166.3 (421.9) 409.4 153.8 Earmarked reserves 1,141.7 - (263.7) 878.0 Capital adjustment account* 1,369.0 - (107.5) 1,261.5 Fixed asset revaluation reserve 54.5 1.6 (39.8) 16.3 Pensions reserve in Corporation (17.3) (31.2) 1.6 (46.9) Other Corporation reserves (26.9) - - (26.9) 2,687.3 (451.5) - 2,235.8

* See Statement of Accounting Policies (Note U) Accounting for PFI transactions and similiar contracts

Earmarked reserves have been established to finance future capital projects, consistent with TfL’s approved Business Plan, and also to cover contingencies. In addition, reserves have been set aside to finance certain capital projects, which were not included in the approved Business Plan but have been committed to by the Board, where it is considered appropriate to fund such projects from reserves.

Statement of Accounts 157 Notes to the Accounts (continued)

The pensions reserve represents pension and other post retirement liabilities as shown on the Balance Sheet excluding those reflected on the Balance Sheets of the subsidiary companies. The merger reserve of £466.1m arose as a result of the transfer of the net assets of LRT, including the share capital of London Underground Limited, to TfL in 2003. It represents the share capital of LU and was taken as a credit to reserves as no consideration was given by TfL in respect of the transfer.

The capital reserves in subsidiaries are distributable reserves in respect of net profits and losses transferred to provide for future capital investment. Other reserves relate to the transfer of the net assets of LRT and LU to the TfL group in 2003.

The General Fund at 31 March 2009 was restated for the prior year adjustment arising from the change in accounting policy as set out in accounting policy note b).

24 Reconciliation of the surplus for the year on the Income and Expenditure Account to the surplus for the year on the General Fund

The surplus for the year on the General Fund was £409.4m higher than (2008/09 £523.5m higher) the Income and Expenditure Account result for the Corporation. This is explained as follows:

The Income and Expenditure Account discloses the income received and expenditure incurred in operating the Corporation’s services for the year and is equivalent to the profit and loss account of a business. Income and expenditure and the resulting surplus or deficit for the year is measured in accordance with the SORP which is essentially the same as UK GAAP.

There are, however, certain items which the Corporation is required to charge or credit to its General Fund when determining the balance on that Fund which are laid down in statute and non-statutory ‘proper practices’ rather than being UK GAAP based. An example of this is that depreciation of fixed assets is charged to the Income and Expenditure Account in accordance with UK GAAP but then excluded from the General Fund in accordance with statute.

The surplus or deficit on the Income and Expenditure Account is the best measure of the Corporation and Group’s operating financial performance for the year. However, the surplus or deficit on the General Fund is also important since it indicates whether the Corporation added to or drew on its General Fund balances during the year. This in turn affects the amount of General Fund balance that the Corporation can take into account when determining its spending plans for the following year.

The table below gives a detailed breakdown of the differences between the income and expenditure included in the Corporation’s Income and Expenditure Account in accordance with the SORP, and the amounts that statute and non-statutory proper practice required the Corporation to charge and credit to the General Fund Balance.

158 Transport for London – Annual Report and Statement of Accounts 2009/10 Corporation Corporation 2010 2009 restated* Note £m £m Amounts included in the Income and Expenditure Account but required by statute to be excluded when determining the General Fund surplus or deficit for the year Depreciation and amortisation of fixed assets 11c (183.0) (178.7) Government grants deferred amortisation matching depreciation 11c 40.0 42.2 Net loss on disposal or retirement of fixed assets 8 (4.3) (5.2) Amount by which pension costs are different from the contributions paid 1.6 (1.5) (145.7) (143.2) Amounts not included in the Income and Expenditure Account but required to be included by statute when determining the General Fund surplus or deficit for the year Statutory provision for repayment of debt 25 - (79.2) - (79.2) Transfers to/from the General Fund that are required by statute to be taken into account when determining the General Fund surplus/deficit for the year Transfers made at the discretion of the Corporation to or from reserves that have been earmarked for specific purposes 23 (263.7) (301.1) (263.7) (301.1) Amount by which the surplus on the General Fund for the year was (higher)/lower than the Income and Expenditure Account result for the year (409.4) (523.5)

* See Statement of Accounting Policies (Note u) Accounting for PFI transactions and similar contracts.

Statement of Accounts 159 Notes to the Accounts (continued)

25 Minimum revenue provision

The Local Government and Housing Act 1989 required a Minimum Revenue Provision (MRP) to be set aside for the redemption of external debt. As a statutory corporation regulated as if it were a local authority, TfL is required to comply with the Local Authorities Capital Finance Regulations. New MRP regulations were approved by the Secretary of State in February 2008. TfL is required to approve an Annual MRP Statement determining the amount of MRP which it considers to be prudent.

The Department for Communities and Local Government issued guidance setting out four possible methods which are deemed automatically prudent, but also states that ‘approaches differing from those exemplified should not be ruled out… the broad aim of prudent provision is to ensure that debt is repaid over a period that is reasonably commensurate with that over which the capital expenditure provides benefits.’

While the statutory guidance provides four suggested options for the calculation of MRP, TfL does not consider that any of these are appropriate to TfL’s circumstances. TfL’s policy on MRP is to treat debt service (interest and principal) in its business plan as an in-year operating cost. As TfL has a legal requirement to produce a balanced budget (and this approach had been extended to the full Business Plan), the cost of debt service is taken account of in determining whether annual budget and business plans are in balance.

TfL has therefore adopted the following policy:

>> No provision is made for debt repayment in advance of years where any such repayment is due >> Debt service, including principal repayment, is treated as an in-year operating cost and will be funded from income in the year the debt service is required >> The ratio of debt service to recurring income (including grant) has an agreed ceiling >> On a programme view, debt maturity should not exceed the useful life of the capital asset financed

26 Capital commitments

Group Group Corporation Corporation 2010 2009 2010 2009 £m £m £m £m In respect of contracts placed for: Surface Transport projects 105.3 121.4 72.2 49.3 London Underground projects 2,355.7 1,103.5 - - London Rail projects 114.5 206.6 - - Other projects 4.1 12.0 1.7 11.9 2,579.6 1,443.5 73.9 61.2

160 Transport for London – Annual Report and Statement of Accounts 2009/10 27 Financial commitments

a) Operating leases As at 31 March, the Group and the Corporation were committed to making the following payments during the next year in respect of operating leases:

Group Group Corporation Corporation 2010 2009 2010 2009 restated* restated* £m £m £m £m Property leases which expire: Within one year 4.6 1.7 - - Between one and five years 11.3 16.4 0.2 - Thereafter 38.8 32.6 6.6 - 54.7 50.7 6.8 - Other leases which expire: Within one year 4.2 0.6 - 0.1 Between one and five years 9.4 9.0 0.2 0.3 Thereafter 18.3 4.6 - - 31.9 14.2 0.2 0.4

* A number of PFI agreements previously accounted for as operating leases are now accounted for as finance leases, following the change of accounting policy described in accounting policy note b). Prior year comparatives have been restated accordingly. b) PPP London Underground has entered into three PPP contracts for the maintenance, enhancement and replacement of its operational assets, although following the failure of the two Metronet Infracos, two contracts are now intra-group. The contracts are for 30 years and are re-negotiable every 7.5 years. The amount payable to the PPP contractors is dependent upon their performance. The capital element of the contracts over the 30 year period is estimated to be between £15bn and £20bn. c) Contingencies There are a number of uncertainties surrounding projects, including claims in the course of negotiations, which may affect the financial outcome. Where claims are possible but not probable, or unquantifiable, such claims are treated as contingent liabilities. Contingent liabilities are not recognised in the Statement of Accounts, but are monitored to ensure that, where a possible obligation has become probable or a transfer of economic benefits has become probable, a provision is made. The financial statements include provisions based on management's best estimate of the outcome of these uncertainties (see Note 18). While any disputes are ongoing TfL does not disclose the quantum or timing of any possible settlement as this could prejudice its commercial position.

Statement of Accounts 161 Notes to the Accounts (continued)

28 Related parties Transport for London is required by the Accounting Code of Practice (ACOP) and FRS 8 Related Party Disclosures to disclose all material related party transactions. A related party is one which has direct or indirect control over the organisation, or influence over the financial and operational policies of the organisation. It follows that those persons who have control or influence over the organisation or policies of the Corporation may be involved in related party transactions where they also have control or influence over the organisation which has dealings with the Corporation. A related party transaction can also arise between parties subject to influence or control from the same external source. The related parties to the Corporation are: >> Its Board Members, Chief Officers and Commissioner >> Central Government >> Greater London Authority (GLA) and other functional bodies >> Partnerships and associated companies >> The TfL Pension Fund Disclosure of these transactions allows readers to assess the extent to which the Corporation might have been constrained in its ability to operate independently or might have secured the ability to limit another party’s ability to bargain freely with it. Most of the transactions between these parties are reported elsewhere in the Statement of Accounts. The Accounts of the TfL Pension Fund are prepared separately and are subject to a separate audit opinion. Board Members, Chief Officers and the Commissioner are required to complete a declaration regarding any related party transactions. Central Government is responsible for providing the statutory framework within which the Corporation operates and provides the majority of its funding in the form of Transport Grant. Transport Grant is paid by the Department for Transport to the Greater London Authority, which in turn pays the grant to the Corporation. Details of Transport Grant are disclosed in the Corporation and Group Income and Expenditure Accounts and Cash Flow Statements and are therefore not included in this note. During 2009/10 there were no other material related party transactions except as disclosed below. Outstanding Total income Total expenditure balance at 31 during the year during the year March 2010 £m £m £m Greater London Authority (GLA) 1.8 2.8 1.1 Metropolitan Police Authority (MPA) 0.3 94.2 (7.7) London Development Agency (LDA) 3.0 0.2 (0.3)

29 Guarantees Section 160 of the Greater London Authority Act 1999 sets out the conditions under which TfL may give certain guarantees, indemnities or similar arrangements.

TfL and its subsidiaries have entered into a joint and several guarantee in favour of HSBC Bank plc as security for any bank indebtedness outstanding from time to time. TfL gave the guarantee under section 160(1) of the Greater London Authority Act 1999.

162 Transport for London – Annual Report and Statement of Accounts 2009/10 TfL has given guarantees in respect of some of its subsidiary companies’ contracts. The amount that could be payable by TfL under the guarantees (as described below) varies depending on a number of factors, including, inter alia, responsibility for termination of the underlying contract, when termination occurs during the life of the contract, breakage cost and other contractual costs which are not known before the event. For information only, the approximate maximum amounts of debt that were envisaged to be drawn by the counterparty at the signing of the agreements are disclosed. For the avoidance of doubt, these amounts may not represent the amounts that could be payable by TfL under the guarantees but are shown here to give an indication of the relative size of each contract.

Approximate maximum amount of debt available for drawdown under the relevant debt facilities as part of the:

£m Agreement with Tube Lines 1,803 Agreement with CityLink 502 Agreement with Canary Wharf Properties (Crossrail) Limited 500 Agreement with QW Rail Leasing Ltd 290 Agreement with WARE 218 Agreement with TranSys 197 Agreement with PADCo and EDF Energy Powerlink Ltd 168 Agreement with CARE 164 Agreement with Pittville Leasing Limited 51 Agreement with APSLL 4 While the guarantee in relation to the PPP Contract of Tube Lines noted above is the most significant guarantee issued on behalf of LU, it should also be noted that TfL guarantees LU termination obligations under a further two contracts relating to the Northern Line Train Service Contracts and the Jubilee Line Agreement. Unlike the agreements listed above, the contracts are not based on an initial amount of debt and so cannot be quantified in a similar manner.

No arrangements were entered into with another person under which that person gives a guarantee which TfL has power to give under section 160 (4) and no indemnities associated with the guarantees were given by virtue of section 160 (5) of the Greater London Authority Act 1999.

30 Events after the balance sheet date On 7 May 2010 an agreement was finalised that paved the way for Tube Lines to become a wholly owned subsidiary of Transport Trading Limited, which is itself a wholly owned subsidiary of Transport for London. The acquisition was completed on 27 June 2010, and changes the nature of the relationship between the Group and Tube Lines. The impact of this will be determined and agreed over the coming months.

The acquisition will be reflected in the Group’s accounts for the year ending 31 March 2011.

Statement of Accounts 163 164 Transport for London – Annual Report and Statement of Accounts 2009/10 Chief Officers (as at 31 March 2010)

Steve Allen Peter Hendy CBE Managing Director Commissioner Finance

David Brown Ian Brown Managing Director Managing Director Surface Transport London Rail

Mike Brown Managing Director Howard Carter London Underground General Counsel

Vernon Everitt Michèle Dix Managing Director Managing Director Group Marketing Planning and Communications

Chief Officer changes Richard Parry was appointed Interim Managing Director London Underground from 1 May 2009 to 21 March 2010. Mike Brown was appointed Managing Director London Underground on 22. March 2010. Malcolm Murray-Clark retired with effect from 30 June 2009.

Chief Officers 165 Members of TfL (as at 31 March 2010)

Boris Johnson Daniel Moylan Chairman Deputy Chairman

Peter Anderson Claudia Arney

Charles Belcher Christopher Garnett

Baroness Tanni Grey-Thompson Sir Mike Hodgkinson

Judith Hunt OBE Eva Lindholm

166 Transport for London – Annual Report and Statement of Accounts 2009/10 Bob Oddy

Patrick O’Keeffe Kulveer Ranger

Tony West Keith Williams

Steve Wright MBE Members of TfL changes Christopher Garnett stepped down from the position of non-statutory Deputy Chairman in February 2010.

Members of TfL 167 Membership of TfL panels and committees (as at 31 March 2010)

Members of TfL Committees of TfL

Boris Johnson – Chairman Audit Committee Daniel Moylan – Deputy Chairman Judith Hunt – Chair Peter Anderson Keith Williams – Vice Chair Claudia Arney Charles Belcher Charles Belcher Daniel Moylan Christopher Garnett Patrick O’Keeffe Baroness Tanni Grey-Thompson Steve Wright Sir Mike Hodgkinson Judith Hunt Finance and Policy Committee Eva Lindholm Peter Anderson – Chair Steven Norris Daniel Moylan – Vice Chair Bob Oddy Claudia Arney Patrick O’Keeffe Christopher Garnett Kulveer Ranger Sir Mike Hodgkinson Tony West Judith Hunt Keith Williams Eva Lindholm Steve Wright Steven Norris Kulveer Ranger Tony West

Members of TfL changes Christopher Garnett stepped down from the position of non-statutory Deputy Chairman in February 2010.

168 Transport for London – Annual Report and Statement of Accounts 2009/10 Panels

Remuneration Committee Corporate Panel Daniel Moylan – Chair Baroness Tanni Grey-Thompson – Chair Christopher Garnett Patrick O’Keeffe – Vice Chair Sir Mike Hodgkinson Peter Anderson Judith Hunt Judith Hunt Boris Johnson Daniel Moylan Tony West Safety, Health and Environment Assurance Committee Environment and Planning Panel Tony West – Chair Sir Mike Hodgkinson – Chair Christopher Garnett – Vice Chair Eva Lindholm – Vice Chair Charles Belcher Daniel Moylan Baroness Tanni Grey-Thompson Steven Norris Daniel Moylan Patrick O’Keeffe Bob Oddy Rail and Underground Panel Special Purpose Committee Christopher Garnett – Chair Daniel Moylan – Chair Steve Wright – Vice Chair Christopher Garnett Peter Anderson Keith Williams Charles Belcher Sir Mike Hodgkinson Daniel Moylan Tony West

Surface Transport Panel Steven Norris – Chair Charles Belcher – Vice Chair Baroness Tanni Grey-Thompson Daniel Moylan Bob Oddy Patrick O’Keeffe Keith Williams Steve Wright

Membership of TfL panels and committees 169 Directors of Crossrail Ltd (as at 31 March 2010)

Terry Morgan CBE Chairman David Allen

Michael Cassidy CBE Patrick Crawford

Sir Joe Dwyer Sir Mike Hodgkinson

Robert Jennings Rob Holden CBE CBE

Heather Rabbatts Andy Mitchell CBE

170 Transport for London – Annual Report and Statement of Accounts 2009/10 Chief Officer changes Rob Holden CBE became Chief Executive of Crossrail on 1 April 2009. Robert Jennings CBE became a director on 30 April 2009. Andy Mitchell became a director on 1 September 2009. Terry Morgan CBE became Chairman on 1 June 2009. Dr Graham Plant ceased to be a director on 14 August 2009. Doug Oakervee ceased to be a director on 31 May 2009.

Directors of Crossrail Ltd 171 Remuneration

This report outlines TfL’s policy regarding The remuneration for each Member for the the remuneration of its Members and year ending 31 March 2010 is shown in the the Commissioner and Chief Officers, table opposite. who are responsible for directing the Policy for Chief Officers affairs of the organisation. Remuneration Committee The Remuneration Committee currently Policy for Members consists of five Members of TfL. The terms Members are appointed by the Mayor and of reference of the Remuneration Committee are non-executive. Remuneration payable for include reviewing the remuneration of the 2009/10 for each Member (with the exception Commissioner and Chief Officers. of the two Deputy Chairmen) related directly to the number of panels and committees on Remuneration policy which each member served. Remuneration Chief Officers are employed by TfL or its also took into account those members who subsidiary companies. The policy of TfL is served as Chair of the committees and panels, to provide remuneration packages for Chief up to a capped maximum. Officers which attract, retain and motivate individuals of the high calibre required to Remuneration levels are set for each Mayoral manage such a large, complex organisation. term, but are reviewed periodically to reflect the responsibilities and accountabilities of Remuneration packages reflect their the role. With effect from 1 August 2004, responsibilities, experience and performance the basic fee was £18,000 per annum. and the market from which TfL recruits. The Members who acted as Chair, or as a Remuneration Committee has established member of a committee or panel, received a reward structure commensurate with additional fees of £4,000 per annum (as a this policy, which includes a base salary Chair) and £2,000 per annum (as a Member) and a performance award scheme against for each appointment. The maximum the achievement of a range of financial and payment in aggregate was £24,000 per operational service performance targets. annum, except for the position of Deputy TfL engaged Towers Watson, one of the Chairman. The annual fee was payable at the leading remuneration consultancies, rate of £60,000 per annum in total for Daniel to review the remuneration of Chief Moylan, the statutory Deputy Chairman, Officers against a peer group of transport, and £40,000 per annum for Christopher infrastructure and engineering companies Garnett, the non-statutory Deputy Chairman. with which TfL competes for senior staff. Most Members also received free travel for themselves and a nominee valid on TfL This concluded that TfL executives are transport modes. paid at the lower end of the remuneration paid in comparator organisations; the total compensation paid to TfL’s Chief Officers is

172 Transport for London – Annual Report and Statement of Accounts 2009/10 Members’ remuneration For the year ended 31/03/10 £ Boris Johnson Not remunerated by TfL Daniel Moylan 60,000 Christopher Garnett* 37,333 Peter Anderson 24,000 Claudia Arney 20,000 Charles Belcher 24,000 Baroness Tanni Grey-Thompson 24,000 Sir Mike Hodgkinson 24,000 Judith Hunt 24,000 Eva Lindholm 21,341 Steven Norris Not remunerated by TfL Bob Oddy 21,341 Patrick O’Keeffe 24,000 Kulveer Ranger Not remunerated by TfL Tony West 24,000 Keith Williams 22,659 Steve Wright 24,000

Members receive reimbursement of travel and subsistence expenses. The expenses claimed for all Members in 2009/10 was less than £2,000 in total. * Christopher Garnett stepped down from the position of non-statutory Deputy Chairman in February 2010

Remuneration 173 Remuneration

generally in the lower quartile of the market more than £100,000 has fallen 8.5 per cent and significantly below the lower quartile for from 212 to 194. There has been an increase the Commissioner and the Managing Director in the number of staff at Crossrail earning of Finance. total remuneration of more than £100,000 (from 8 to 23) due to the recruitment of Remuneration of senior staff senior staff to take the project into its delivery In recognition of the difficult economic phase. There was also an increase in the climate and financial constraints on TfL, in number of severance payments (from 11 to 2009/10 the base pay of the Commissioner, 34) made to those who would have earned Chief Officers, Directors and senior managers total remuneration of less than £100,000 was frozen and a reduction applied to the excluding the severance payment. overall performance award budget in respect of delivery in 2008/09. The Commissioner’s Other benefits salary was £348,444. The Commissioner was also entitled to a performance award for Senior officers are eligible to receive the 2008/09 of £136,590 but elected to receive following: only £61,466 of this. >> Private medical insurance In recognition of the continuing difficult >> Annual health check-ups economic climate, the base pay of the Commissioner, Chief Officers and Directors >> Subscriptions to professional will again be frozen for 2010/11. organisations The Commissioner and Chief Officers >> Pension have also decided to waive in their entirety the performance awards made to them in respect of delivery in 2009/10. For the Commissioner, the award waived was £132,409. The combined sum in performance awards waived by the Commissioner and Chief Officers amounted to around £500,000. The total number of TfL staff receiving total remuneration of over £50,000 is on page 126 and the remuneration of senior employees with a base salary of over £150,000 is on page 128. As a result of the pay freeze and reductions in performance awards, the underlying number of TfL staff earning total remuneration of

174 Transport for London – Annual Report and Statement of Accounts 2009/10 Remuneration

>> Where appropriate, recompense for loss >> Member contributions payable at the rate of benefits from previous employers and/ of five per cent of pensionable salary or to comply with TfL’s policies >> Pension payable in the event of >> As with all TfL employees, the retirement due to ill-health Commissioner and Chief Officers are provided with a for >> An employer contribution of up to 10 per themselves and a nominee valid on TfL cent of salary to the TfL Supplementary transport modes. Chief Officers who Pension Scheme, a ‘defined contribution’ joined after 1 April 1996 are eligible to scheme which provides additional receive reimbursement of 75 per cent benefits for those earning above the cap of the cost of an annual season ticket The Commissioner is entitled to a pension on National Rail. Chief Officers based on TfL service equal to what would be employed by predecessor organisations due under the TfL Pension Fund if the cap did prior to April 1996 receive National Rail not apply. facilities in line with the policy of the predecessor organisation Crossrail remuneration Pension arrangements committee Crossrail is a wholly owned subsidiary of Chief Officers are eligible for the following TfL with its own governance arrangements. pension benefits: These include a board comprising executive >> Membership of the TfL Pension Fund, a and independent non-executive directors ‘defined benefit’ scheme which provides as well as two non-executive directors for a pension payable from age 65, based appointed by TfL and DfT. The Crossrail on 1/60th of pensionable salary for each Remuneration Committee operates to its year of service own Remuneration Framework, in respect of Crossrail Limited. >> Pensionable salary is capped for joiners from 1 June 1989. For 2009/10, the cap was £123,600 >> Up to 25 per cent of the value of the pension can be taken as a cash sum (under current legislation) >> Lump sum death benefit of four times salary on death in service >> Dependant’s pension and children’s pensions are paid on death in service and after retirement

Remuneration 175 Alternative formats

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